German Chancellor Angela Merkel addresses the media at the Chancellery in Berlin, Germany, January 18, 2017. REUTERS/Fabrizio Bensch

LONDON (Reuters Breakingviews) - Germany’s job miracle has a dark side: growing inequality. This could threaten Angela Merkel’s bid to win a fourth term as chancellor in September elections, even though employment is at an all-time high and real incomes have risen markedly.

The poorest 10 percent of households in Europe’s wealthiest economy are becoming worse off, both in relative and absolute terms, according to a new study published on Thursday by the DIW Berlin economic think tank. After adjusting for inflation, their disposable income was 8 percent lower in 2014 than it had been in 1991. To rub salt in the wounds, the richest 10 percent of households enjoyed an increase of more than a quarter in their incomes over the same period.

Merkel in 2015 introduced a relatively generous minimum wage, which was this year increased to 8.84 euros per hour. Otherwise, she has done little to tackle the problem. Precarious jobs in the low-wage sector are implicitly subsidised, welfare benefits have risen by less than inflation for years, and the tax system punishes single parents. Her successive finance ministers have rather focused on fiscal discipline, with the result that Germany has generated a budget surplus in every year since 2014.

In the past year, a perception that the fruits of economic growth are unevenly shared has translated into a backlash at the ballot box. Take Britain’s vote to leave the European Union in June 2016 or the more recent election of U.S. President Donald Trump. Rising inequality could therefore make Merkel more vulnerable at a time when security concerns are already chipping away at her popularity.

The Social Democrats, currently the junior partner in government, have rebooted their campaign by naming popular Martin Schulz as Merkel’s challenger. The former president of the European Parliament has in the past criticised the austerity measures imposed on southern European countries, such as Greece, and is now putting social justice at the heart of his campaign at home. Angela Merkel will put her own job on the line if she ignores the dark side of Germany’s employment boom.