https://www.indybay.org/newsitems/2025/10/31/18881099.php
Mass poverty in Germany is getting on the nerves of those who look after the capital market. The mainstream media can understand this.Too many people are taking money out of the social welfare system, and too few are paying into it. Of course, this cannot work in the long run. And so the media are looking for explanations. Most of the time, it boils down to the Germans mysteriously becoming lazier and lazier and fattening themselves up at the expense of decent workers. With this explanation, the economy and the capital invested in it are naturally off the hook. The fact that “economically” minded entrepreneurs are by no means interested in employing as many high-earning employees as possible is ignored. Instead, work is condensed and surplus employees are transferred to the state, i.e., the taxpayers, for support. It is the logic of capitalism itself that is responsible for many of the social upheavals of our time. It is not “the poor” who are too expensive for society—it is capitalism. It is unfortunate that the mainstream media are playing along with this game. An article for the special edition “Poverty in Germany.”
by Das Gewerkschaftsforum
by Suitbert Cechura
[This article posted on 10/16/2025 is translated from the German on the Internet, https://www.manova.news/artikel/der-unbezahlbare-sozialstaat.]
After the chancellor announced at a party event: “The welfare state as we know it today can no longer be financed with what we achieve economically” (quoted from Bastian Brinkmann: “Is the welfare state really no longer affordable?”, SZ, August 27, 2025), the media eagerly picked up on the topic. Here, the chancellor finally showed energy—or at least determination—to tackle the major challenges facing Germany as a center of capital, and that is always newsworthy!
Now, most citizens are not contributing any less than before, going about their normal jobs, whether regulated by collective agreements or precarious, but political priorities have clearly shifted. Although it is striking that many things—and currently extraordinary things—can be financed, such as the war in Ukraine, where the German government has just pledged billions in support, or the unlimited amount of military spending that has been approved—the government’s financing problems are considered indisputably important by journalists who toe the party line. Here they can sharpen their minds and keep a close eye on politicians.
Living expenses — a single social cost
And so they immediately start doing the math:
“The welfare state has indeed grown. This is evident from the social budget of the Federal Ministry of Labor. This calculation includes all social benefits together, not just pensions and health insurance, but everything from continued pay in the event of illness to parental allowance and citizen’s income. A long-term comparison shows that Germany spent more than 31 percent of its economic output on social welfare in the previous year.” (SZ)
The writer does not seem to be well informed, as continued payment of wages in the event of illness is not paid by the state, but by employers. And so he cheerfully mixes up the figures from the budget with those from the gross national product. Nevertheless, he comes to a clear conclusion at the end—one that can be interpreted in very different ways. The increase in social benefits reflects the fact that more and more people in the country are unable to earn a living through wages or salaries. The causes may be manifold—whether it is because refugees do not speak German and therefore cannot find work, because pensions are insufficient, or because personal income plus nursing care insurance does not cover the costs of care—but the overall balance sheet could also be summed up quite simply by stating:
More and more people are poor
But no one wants to address the widespread poverty in the country. Instead, the question of whether the welfare state is too expensive is repeatedly raised:
“However, when asked whether the welfare state has become too expensive, there are only subjective answers, which differ between the Social Democrats and the Union. There is no economic justification for a tipping point at which everything automatically collapses.” (SZ)
There is no fixed yardstick for how much support the state wants to provide for the poor in the country. One thing is certain, however: without state support, many people in the country cannot make ends meet because living on wages and salaries is an uncertain business and limited or no income has an existential impact on people.
Of course, children who first have to be trained as workers, as well as the elderly, the sick, and people with disabilities, cannot work and put themselves at the service of employers. Without securing the next generation, maintaining a reserve army of unemployed people, and caring for the sick and elderly, society cannot function—a society based on the use of people who are willing and able to work for the production of wealth as monetary gain in private hands.
Government social spending is not a benefit for citizens, but a necessary cost for maintaining a social fabric that is constantly producing poverty and misery under the prevailing capitalist economic system.
Even if some people—including trade unionists—like to view this society as one in which some people care for others, it is primarily characterized by oppositions such as buyer versus seller, tenant versus landlord, employer versus employee, which affect their economic foundations.
It is a society determined by competition for money, which necessarily produces winners and losers. To ensure its functioning, it requires social costs, which then burden the state budget.
Its rationale is to use all means to strengthen the nation, i.e., to promote the economy, on whose profitable growth everything and everyone depends.
Growth does not serve to provide for the citizens, but to increase the wealth of those who already have wealth, i.e., the capitalists, who are now called investors and, as we know, do only good as long as they create jobs.
They use the supply of goods and services to the population to realize the profits from their investments and leave no opportunity for money multiplication unused. The solvency of domestic citizens always proves to be too low for this excessive need. That is why the state must use its economic and military power to ensure that foreign markets are also open to companies in order to promote their growth.
The costs of supporting its own citizens are a double burden in this regard. They limit the state’s resources for expanding its power and, through social security contributions as part of wage costs (the famous “non-wage labor costs”), also weigh on companies’ profit calculations.
This is a contradiction that some economists want to eliminate simply by having the state stimulate the economy with sufficient force to ensure that profits flow freely and social spending can coexist peacefully. However, because the contradiction remains despite the vision of constantly flowing, socially acceptable profits, there is always a state and corporate interest in limiting these costs.
As I said, there is no measure of how high these costs must be to guarantee the functioning of society, only a constant test of what those who produce the wealth of this society are willing to tolerate.
And that is obviously a great deal, because there is no sign anywhere of serious resistance to the constant reduction in real wages—including through ever-increasing social security contributions. This is especially true since the unions are more committed to securing social peace—in other words, accepting deteriorating living conditions—than to fighting these measures, as was once again exemplified on September 1, the unions’ legendary anti-war day: The DGB published an appeal that essentially expressed its approval of the government’s course and only asked for social moderation in further action.
Even so, as Overton recently stated, it is clear that they support the armament and do not want to take note of the declarations of intent regarding “reform of the social systems” — as the plans for cuts are called. Since protest against this “truce policy” has not yet penetrated the union and there is hardly any political resistance to the national consensus, this process of effective wage cuts can be continuously driven forward from one government to the next.
Concerns about economic growth
When journalists take the chancellor’s concerns to heart, they do not ask themselves what the situation he describes means for the people of the country. Their interest is rather in economic growth. And the author of the SZ is not alone in this. The Bild newspaper also takes up this concern, this time in a form that is welcome variety for this perennial topic, namely by not stirring up agitation itself, but letting the Wall Street Journal have its say:
“Nations have built welfare and social systems that are so large that they exceed the financing capabilities of slowly growing economies. But because the social safety net is so broad and extends deep into the middle class, it has become impossible to reform it.“
And so Bildzeitung and SZ are on the same page when the author of the quality newspaper warns:
”Higher social spending and taxes cost jobs. Excessive social spending thus burdens economic growth and reduces future prosperity.”
A strange logic, by the way. Those in need are now supposed to cut back so that prosperity can grow in the future—prosperity that is not theirs at all.
At the same time, the writer does not forget to remind them of their dependence on the success of capital. Yes, they can only earn a living if the profits of the other side are secured. That is why it is also important to make those affected aware that securing their livelihood is a burden on companies and their profit margins.
The fact that taxes and social security contributions now eat up almost half of wages and lead to net wage reductions, on the other hand, plays no role in the considerations of responsible journalists. And so the SZ author immediately sets out to find the causes of the alarming growth in the social budget, thereby expressing how much he has taken the chancellor’s concern to heart:
“The biggest increase was in family policy. Expenditure on child and youth welfare, for example, has more than quintupled since the early 1990s and has risen more than twice as fast as economic output. One of the reasons for this is that there are now many more daycare places.” (SZ)
Family policy is not about ensuring that families are well off. After all, women are expected to have children, but also to enter the labor market in greater numbers. This not only provides companies with additional workers—especially in the low-wage sector—but also relieves the burden on the social security funds, in which they are not simply co-insured, but must pay in themselves in order to receive the corresponding benefits.
To ensure that women want this, various governments have also done their part to help women achieve their goals. General wage cuts have already meant that one income is no longer enough to support a family, but that women must also earn money. Family work has also become an additional risk because maintenance claims have been radically reduced in the event of separation.
Pension levels have been cut so drastically and widows’ pensions slashed that it has become essential, though often unattainable, for women to build up their own pension entitlements. This means that the state must also take care of the nation’s offspring if mothers are to be available to their employers.
The expansion of daycare places, which is recorded as a social cost, is intended to enable the combination of work and family life and thus ensure that the double burden can be borne—a truly social act!
Identification of freeloaders
Anyone who takes the political verdict to heart as much as the writer of the SZ does cannot help but seek out people who do not deserve support from the state.
In contrast to the Bild newspaper, which always finds unemployed people in the social hammock, the critical journalist sees the freeloaders in the middle of society:
“The German welfare state is primarily geared toward the middle class, which is where most of the money flows. This is because many government payments depend on how much you have paid in previously. Those with a higher income receive a higher pension, higher unemployment benefits, and higher parental allowances. A few years ago, the employer-funded German Economic Institute calculated that more than 40 percent of state transfers go to the highest-income half of the population in Germany. This is why there is repeated criticism that German social policy does not accurately help the poorer members of society.” (SZ)
A criticism that the writer apparently agrees with. However, the critical view of the highest-income half does not include those who are truly different from the rest of society and are unlikely to ever receive unemployment benefits. When it comes to income statistics, billionaires and millionaires are not compared with wage and salary earners, but only the different categories of dependent employees are compared in terms of their income — and, as demonstrated in the article, pitted against each other. While criticism of the truly wealthy is always met with accusations of social envy, in this case it is exactly the opposite: it is natural to stir up social envy.
And when the author raises the question, “Is demographic change to blame for everything?” the answer is already clear: on the one hand, it is supposed to be due to the ratio of young to old, but on the other hand, it is not only that; that much differentiation is necessary.
Somehow, everyone knows that the ratio of contributors to beneficiaries does not depend on the number of births, but on the number of people that companies want to employ as a worthwhile workforce or not — and how the state regulates this ratio.
Nevertheless, journalists like to reheat the story of demographic change. This is another way of pitting citizens against each other. When it comes to stirring up envy and inciting citizens against each other, all representatives of the mainstream media know what they are doing:
“It is fatal that the mix of citizen’s income, housing allowance and child supplement makes it attractive for many people not to work or to work only a little.”
And so the problem lies not with politics, but definitely with the citizens:
“Nevertheless, the costs for health insurance companies will rise particularly sharply in the coming years if nothing changes. This is because the German healthcare system is considered inefficient by international standards. Germans go to the doctor more often and stay in hospital more frequently and for longer than in other countries, where people nevertheless live longer.” (SZ)
Measuring the health of the population by the healthcare system is absurd. It’s like measuring the quality of a car by the workload of repair shops. After all, this comparison completely ignores the stresses and strains to which people in individual countries are exposed.
People like to praise the productivity of the German economy, which implies that employees there are under a lot of pressure. In addition, Germany is rich in fine dust in its cities, toxins in the environment, and other pollutants. Only if you ignore all of this can you paint a picture of citizens enjoying themselves in hospital beds.
And the fact that the state has just shifted a major cost factor from the states to the health insurance companies as part of the hospital reform does not strike a critically researching SZ journalist. But even he is not entirely unaware that it is not only up to citizens to decide how social security funds are financed:
“Rising social security contributions are therefore not a demographic inevitability. The IGES Institute has calculated that with appropriate reforms, health insurance contributions could be kept constant. And economists from the German Council of Economic Experts have made proposals on how pension costs could be contained. In his speeches over the weekend, Chancellor Merz promised to tackle reforms with verve.“
As already quoted, he does not want to be ”irritated by words such as ‘social cuts’ and ‘clear-cutting’.”
The aim of economic expertise becomes clear when the chancellor receives backing for his announced reforms: those who are dependent on assistance must continue to bleed so that the production of wealth can rise again — namely, those who already have wealth and invest it skillfully for the purpose of increasing it.
The author of the SZ cannot be radical enough. The only question is how long those who produce society’s wealth will continue to bear the costs of their living expenses for the growth of capital.
Suitbert Cechura is a retired university professor of social medicine.
Editorial note: This article first appeared under the title “The welfare state unaffordable? Or capitalism too expensive?” on the Gewerkschaftsforum website.
The Gewerkschaftsforum is an online journal that primarily deals critically with trade union issues, but also with social and economic policy issues. It was founded at the end of 2013 by trade union activists in Dortmund and aims to draw attention to the interests of those in power, support the trade union struggles of workers, and give a voice to the unemployed and poor, who are becoming increasingly silenced. For more information, visit gewerkschaftsforum.de.