Germans also wear yellow vest: protesting against runaway rent and too little pension

 Germans also wear yellow vest: protesting against runaway rent and too little pension

Frances weeks-long yellow vest protest movement was eventually tempered by the compromise of French President Mark Long. This gives hope to those who are dissatisfied with the social situation in other European countries.

On the 15th local time, the yellow vest movement spread to Germany. The two left-wing factions Munich up and unyielding France formed an alliance. The first German yellow vest demonstration was held in front of the Munich Grand Theater. Hundreds of people wearing yellow vest participated in the demonstration.

Unlike the radical French protestors, the yellow vest demonstrators in Munich, Germany, were relatively peaceful. They did not burn cars or smash shops. They mainly protested against the high rent and low retirement pension. This was also a problem that the German government had not solved for many years.

The picture shows the protestors holding up a sign saying Pay rent for everyone

Unbearable rent

As the third largest city in Germany, Munich ranks first in terms of rent and house price for many years, far surpassing Berlin, the capital of Germany, and Hamburg, the second largest city in the country.

At the end of September this year, UBS released Munichs second place in the global housing bubble index, second only to Hongkong, China. It said that in the past ten years, Munichs housing prices have doubled, and in the past year alone, the nominal rent of the city has increased by 9%.

So how expensive is the rent in Munich? According to a survey released by the German Institute of Economics in early October, the rent of Munich university students is the most expensive in Germany. The monthly rent of Munich university students is about 600 euros (about 4680 yuan), while Frankfurt ranks second only needs 488 euros (about 3806 yuan), while the cheapest Magdeburg only needs 200 euros (about 1560 yuan) per month on average.

The first financial reporter inquired about Immobilienscout, Germanys largest housing rental website, and found that an ordinary 24-square-metre single apartment in downtown Munich had rented more than 1,000 euros (about 7,800 yuan).

According to the data of Statista, Germanys per capita after-tax income in 2017 is about 1890 euros (about 14.7 million yuan), which is in the upper and middle reaches of Europe, basically lagging behind the Nordic countries, Switzerland, Luxembourg and other small rich countries. Munichs per capita income is higher, about 2400 euros (about 18.7 million yuan). Nevertheless, Munich blacks still have to spend more than 40% of their income on rent, which has caused complaints among local people.

In fact, three months ago, Munich had a huge demonstration, tens of thousands of people took to the streets to protest against rent increases and luxury decoration. The protestors demanded that the government provide social housing for the homeless, set rent caps, prevent speculation in rent prices, and raise the minimum income.

The Munich governments failure to control rent increases in recent years has also indirectly led to a rare setback in Octobers state legislature election for the ruling party, the Christian Social Union, in Munichs state, with the lowest support rate in 60 years.

Munichs soaring rent is closely related to the inflow of foreign entrances and the local housing shortage. The German Housing and Real Estate Association estimates that Germany has built 1 million fewer housing units than expected since 2009, but its population has increased by 2.5 million, with a significant increase in the number of immigrants. In addition, more and more people from small and medium-sized German cities move to big cities such as Munich, which further leads to the shortage of local housing, thus driving up the rising rent. Sun Yang, general manager of SunImmobilien GmbH, told First Financial Journalist that because of the local policy, the German Real Estate Development Corporation has a very difficult land acquisition and a long cycle, so the pace of housing construction is far behind the market demand.

Munichs per capita income has been at the forefront of Germany for a long time, which has attracted a large number of skilled immigrants and brought about a new round of urgent demand for housing, Sinweian, general manager of Dexin Real Estate Co., Ltd. in Munich, Germany, told First Financial and Economic Journalist. At present, Munich is in a period of massive population influx, and the relevant agencies predict that the population growth cycle in Munich will last at least until 2030.

Unsustainable pensions

In addition to protesting against unaffordable rents, German yellow vest demonstrators demanded higher pensions.

Germany has a minimum hourly salary standard of 9.19 euros per hour (about 71.6 yuan), but there is no minimum pension standard. How much statutory pension employees can receive after retirement depends mainly on how much pension insurance they have paid in their career. Taking a 27-year-old German who started working as an example, assuming that his annual pre-tax salary is fixed at 40,000 euros, and that he pays pension insurance for 40 years according to this salary standard (the individual contribution ratio is about 9% of pre-tax salary) until he retires at 67, he can receive a monthly pension of about 136 euros (about 102,000 yuan) after retirement, which is similar to that of German retirees in 2017. The average pension is about 1350 euros.

It seems that the per capita pension of more than 10,000 RMB is not a lot, but Germanys pension is not completely tax-free, but is counted as personal income, beyond a certain standard still need to pay personal income tax. In addition, even retirees in Germany have to pay health insurance, ranging from tens of euros (public insurance) to hundreds of euros (private insurance) a month.

A 67-year-old woman who had just retired took to the streets because of her dissatisfaction with her meager pension. She said that her pension was less than 1,000 euros, which was not enough. She even spent money on coffee with her friends. We are always told that social welfare is good in Germany, but why dont many people feel it personally? She asked the government to set a minimum pension of 1200 and limit rent increases.

Bastian Pflurger, 32, protested against the slogan If the bank was sick, it would have been saved because he had to retire early because of his chronic illness, but because of his shorter working life, his meager pension could not support his living expenses. Some things have to change and dissatisfied people should take to the streets, he said.

Although Germany is one of the earliest countries to implement the old-age insurance system in the world, its social fertility rate is low and aging is very serious. The average age of the whole population is close to 50 years old. It is expected that by 2019, the number of elderly people over 60 in Germany will exceed the number of young people under 30 years old, and the young labor force is very scarce, resulting in insufficient pension budget.

According to the statistics of the German Pension Insurance Association, the level of statutory pension in Germany has been declining since 1990. In 1990, retirees with 45 years of service could also receive 55% of their after-tax income on the job as a retirement pension, which dropped to 52.6% by 2000 and is currently only 48%, compared with 43% expected by 2030.

To remedy this budget gap, the German government this year adopted a new draft Immigration Act with astonishing efficiency, aiming to attract professionals outside the EU to fill the vacancies in the labor market and alleviate the crisis facing the pension system.

Pufferg said the success of the French yellow vest movement encouraged them and the protests could be effective.

Party color

Sahra Wagenknecht, chairman of the Bundestag Left-wing Party, set up a new Left-wing rally movement on September 4 to fight against AfD, a populist right-wing party that has risen rapidly in recent years. The Munich Rise Movement is its branch in Munich.

Christian Lange, head of Munich Rise, said that although the number of demonstrators was small, it was a good start. The French yellow vest movement started with a small number of people, he said. He said he planned to cooperate with the Rise Up movement in other cities, such as Hamburg, Leipzig and Stuttgart, to hold demonstrations in the coming weeks in other big German cities. Whether the political leaders of the left-wing party will be directly involved is uncertain.

We need to put enough pressure on the government to meet our demands: control rents and increase care, said Ates Gurrpinar, a spokesman for the left-wing party in Bavaria, Germany.

Source of this article: First Financial Network Responsible Editor: Li Wan_B11284