Income refers to the benefits that a natural or legal person receives in the form of money or a thing over a certain period of time . Colloquially, natural persons are also referred to as earnings, while legal persons refer to profit or surplus.
In economics , income as primary income or, what is equivalent, as national income represents the sum of all domestic added value of social production . In microeconomics, as in macroeconomics, it is one of the variables for assessing economic welfare .
Economic concepts of income
Income in microeconomics
Income and net worth
Income is the difference between the net worth at the end of the year and the net worth at the beginning of the year plus what was consumed during this period.
- Income = net worth (31.12.) - net worth (1.1.) + Consumption (1.1. To 31.12)
Labor income and capital income
Income in Macroeconomics
In macroeconomics , income is taken into account for the cumulative measurement of the wealth inflows of an economy . The different economic concepts of income are standardized internationally by the national accounts (VGR), among other things as the European system of national accounts (ESA). This in turn uses the definitions from the United Nations statistical system " System of National Accounts " (SNA). The starting point there is the primary income , which is conceptually identical to the national income (or earlier social product). In its gross form before depreciation as gross national income , it is of great importance for the European Union as an indicator of the income level of the respective member states or their population, and therefore provides (in addition to the sales tax portion) the yardstick for the membership fees that make up the EU's own resources . The term net national income (formerly net national product), which is also used internationally, is gross national income minus depreciation. The term national income used in the German-speaking area is net national income less indirect taxes (statistical technical term here: taxes on goods ) plus subsidies. Mathematically, the amount of national income in a certain country compared to its national income is primarily based on the extent to which the state draws its income from direct taxes or indirect taxes .
The relationship between the various income components can be calculated using the distribution calculation. The two main macroeconomic quantities used to measure income are there
Adjusting income for inflation
This is understood to be the price-adjusted nominal income. It is determined by dividing the index (comparative value) of the nominal income by a suitable price index . Real income can only be given as a comparative figure in the form of a change or an index. It serves as an indicator of the actual purchasing power of income. Illustratively, it is about the amount of goods and services that one can buy based on current prices.
- Example index
With an inflation rate of 4% and an increase in nominal income of 3%, the real income index is 99.04% according to the calculation formula:
The amount of goods and services that one can afford is only 99.04% compared to the previous year.
- Example change
With an inflation rate of 4% and an increase in nominal income of 3%, real income falls by 0.96% according to the calculation formula:
The amount of goods and services that can be afforded has decreased by around 0.96% compared to the previous year.
Adjustment of income for taxes and duties
Not all of the income can be used for private consumption or investments , since a considerable part of the income is consumed through taxes and duties , for example . For this reason, the disposable income only takes into account that part of the income remaining for consumption or saving. Income taxes, wealth taxes, social contributions and other current transfers are deducted from income, social benefits received and current transfers received are added.
Tax definition of income
The income tax law in Germany distinguishes between revenue , earnings , income and taxable income .
- Revenues are the employees in gross earnings in the self-employed the proceeds .
- Income arises when the costs caused by the generation of income ( income- related expenses for employees, business expenses for self-employed) are deducted from the income ( objective net principle ).
- Income results after deducting pension expenses and other special expenses as well as extraordinary burdens ( subjective net principle ).
- Taxable income is the assessment basis for the income tax rate and is usually the same as income in terms of value, with the exception of the deduction of child allowances .
Distribution of income
The income distribution examines the distribution of income in different social groups. Income is unevenly distributed in all OECD countries. The term “income gap” is also used to symbolize the difference between low and high incomes in a society .
In addition to the distribution of income, the development of incomes over time for certain groups (e.g. occupational groups, men, women; cf.Gender Pay Gap ) and the income dynamics of individuals (often associated with social advancement or decline) are subjects of research. The latter are often determined with longitudinal studies .
According to the microcensus , 5.5% of the population in Germany live below the poverty line despite having a job . Semi-skilled and unskilled workers and self-employed without employees are particularly affected. See also: Working Poor . The average income of all workers in Germany in 2006 was around EUR 1,503 per person per month.
One-person households with a net income of more than EUR 2,700 per month no longer belong to the middle class, even if those affected often do not see it that way. They can be called "wealthy". From a net income of 3,600 euros, science describes a person as rich.
Manager salaries have risen significantly compared to the wages of average employees in Germany in the last few decades, more than three times more between 1987 and 2006:
|year||Manager: employee wage ratio|
According to the OECD, income inequality increased more sharply in Germany in 2008 than in any other OECD country. The disposable income was highest in the group of self-employed with more than ten employees. It was lowest among unskilled workers and farmers . The farmers had even less disposable income than the unskilled; the median income ( median ) was 1,252 euros per month, the average income was more than twice as high at 2,706 euros per month.
In 2010 the average gross income in Germany was € 2,136 per month; Women earned an average of 23% less than men. The difference between the individual economic sectors was also partly clear: On average, a full-time employee in the hospitality industry earned 1,972 euros in the fourth quarter of 2011, and a full-time employee in the information and communications industry earned 4,430 euros, each before deduction of taxes and employee's share of social security contributions .
An OECD study presented at the end of 2011 confirmed this trend: In 2008, the 10% of the population with the highest income earned around eight times the bottom 10%; In addition, the gap between the top income and the bottom 10% of full-time workers increased by 20% between 1995 and 2010.
In France, the mean net annual income of employed persons was 20,670 euros.
In Austria in 2010 the employed (excluding apprentices) had an average net annual income of 18,366 euros.
American President Theodore Roosevelt gave a speech to 30,000 people in Osawatomie , Kansas state , in August 1910 that went down in the history books. He denounced the huge income inequality and spoke of the need for a regulated economy and a strong government. "Human welfare" is more important than the profit of the individual. He called his program to strengthen the middle class "New Nationalism".
In the United States, the ratio of manager salaries to average employees was 35: 1 in 1980 and 319: 1 in 2008.
American society “lacks the center. The rich and poor in the country have diverged rapidly, so rapidly that the top percent of citizens draw almost a quarter of all incomes - twice as much as 25 years ago. In the end, America grew almost exclusively for its rich, the middle and lower classes even lost purchasing power on average. And jobs too. "
President Barack Obama gave a keynote speech in December 2011 - also in Osawatomie - in which he also denounced economic inequality. Growing inequality belies the promise of the American dream that anyone could do it if they just wanted to. This is not about any political debate, but about "the crucial question of our time".
- Federal Agency for Political Education , Income and Wealth
- Federal Statistical Office , destatis.de: earnings and labor costs
- German family association . March 20, 2018, deutscher-familienverband.de: Category: Publications -> Horizontal (income) comparison 2018
- Paris School of Economics , g-mond.parisschoolofeconomics.eu: The World Top Incomes Database
- lohnspiegel.de: Who deserves what? Income in 425 professions in Germany
- United Nations University , researcwider.unu.edu: World Income Inequality Database
- vgrdl.de: National accounts of the federal states (time series on the development of incomes in Germany)
- Brockhaus Encyclopedia . 19th edition. tape 6 . FA Brockhaus, Mannheim 1988, ISBN 3-7653-1100-6 , p. 179 f .
- Norbert Dautzenberg: Income. In : wirtschaftslexikon.gabler.de. Springer Gabler, accessed November 10, 2016 .
- Vimentis - Lexicon: Income scissors
- Psychology and Privilege - The Unpleasant Truth of Social Injustice. In: Deutschlandfunk Kultur. Deutschlandradio, accessed on July 19, 2019 (German).
- Florian Rötzer: Why have manager salaries soared in the last few decades? In: heise.de, Telepolis, September 19, 2010 (last accessed: September 22, 2010)
- Theodor Schaarschmidt: The cherries in the neighbor's garden. Spektrum.de, accessed on May 3, 2019 .
- OECD (2008), Growing Unequal ?: Income Distribution and Poverty in OECD Countries. COUNTRY NOTE GERMANY (IN GERMAN): GERMANY. (PDF; 257 kB)
- Rainer Geissler: The social structure of Germany . VS Verlag für Sozialwissenschaften, Wiesbaden 2006, ISBN 3-531-42923-X , p. 82.
- Jan Goebel, Martin Gornig, Hartmut Häußermann: Polarization of incomes: The middle class is losing. In: diw.de, weekly report of DIW Berlin No. 24/2010 (PDF; 469 kB)
- Rheinisch-Westfälisches Institut für Wirtschaftsforschung: On the income situation of private households in Germany. (PDF; 1.1 MB) April 2009.
- The gap between rich and poor is widening - Badische Zeitung , December 6, 2011.
- Le revenu salarial s'établit à 20 670 euros en moyenne en 2014. INSEE , accessed on 19 May 2017 (French).
- Annual personal. Statistics Austria , March 1, 2012, accessed on May 23, 2012 .
- Theodore Roosevelt's Osawatomie Speech. Kansas Historical Quarterly, accessed May 23, 2012 .
- So in the US, the average manager earns 319 times as much as the average employee. Florian Rötzer: Why have manager salaries soared in the last few decades? In: Telepolis . Status: September 19, 2010; Last accessed: September 22, 2010.
- Uwe Jean Heuser in zeit.de of June 3, 2011: "More Greek than the Greeks" - The United States has horrific debts. How do you get out of there? In: The time. 23/2011.
- spiegel.de: Occupy America.
- Guardian.co.uk: Full text of Barack Obama's speech in Osawatomie, Kansas.