In the view of the chief economist at Germany’s largest state bank, the gap between rich and poor could close again in the medium term. Moritz Kraemer, chief economist at Landesbank Baden-Württemberg (LBBW), told the German Press Agency that he considers the fact that real wages are falling in view of the high inflation to be a temporary phenomenon. “I think market forces will always prevail in the end. And market forces are such that we have a shrinking labor supply.”
The labor shortage is an economic problem and cannot be credibly solved by large-scale immigration because society is not willing to do so, he said. “And if companies ask themselves how they get people, then an obvious answer is: You have to pay more.”
He therefore believes that employees will have more money at their disposal in the medium term. At the same time, the golden age of the capital market since the end of the European Central Bank’s zero interest rate policy is over. “So the double-digit returns on shares or real estate, which the wealthy in particular collect, will not live on in this form either.”
This means that the increasing unequal distribution that has existed in Germany over the past three decades will be stopped and the trend slowly reversed. He cannot say whether that will be the case in 2023 or 2024 – but structurally he is sure that it will happen. “There are fundamental forces at work right now.”
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