Salary Differentials between East and West of Germany

Even 20 years after the fall of the Berlin Wall in 1990 there are still enormous salary differentials between the “old western” and the “new eastern” federal states.  Latest surveys of the DIW (Deutsches Institut für Wirtschaftsforschung or the German Institute for Economic Research) show that after a few years of approach the differences in wages has increased during the last ten years. In 1997 the real household net income in West Germany was 1,373 € and in East Germany 1,137. Compared to the year 1990 there had been a great changes in salary. The dispute was less than 300 euros however, in the following years the development remained static. In 2008 the relation between the eastern and western salary changed once again. On the level of feelings the differences are even bigger. Most of the East Germans do not feel as if they are being paid fairly. In contrast the majority in West Germany think that their salary is suitable. In addition the East Germans estimate their circumstances of living much worse than those of the western people. Therefore the household net income is only one of a few indicators to figure out the economic situation of a population. With subjective questions the DIW found out that the people of the new eastern federal states are more dissatisfied than the population of the old federal states. Although the satisfaction of life has increased it has never reached the level of the western satisfaction. It is especially shown in the evaluation of income, standard of life and health. Child care is the only field the East Germans are more satisfied with than the West Germans. Sadly to say, latest statistics show that the unemployment rate in East Germany is almost twice as high in the western part of Germany. The IAB (Institut für Arbeitsmarkt- und Berufsforschung/ Institut for Labour Market and Job Research) believe this is because the labour participation of women in East Germany is still significantly higher than in West Germany. The approach of making things equal between East and West Germany has been the goal of all cabinets since the German Reunification. However, the differences are still enormous and we have to think about the question of what went wrong in the reunification progress.

 

http://www.karrieretrends.de/wissen/analysen-und-studien/ost-west-angleichung-des-beschaeftigtenanteils/

http://www.spiegel.de/wirtschaft/soziales/0,1518,645335,00.html

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4 thoughts on “Salary Differentials between East and West of Germany

  1. That’s very interesting, I had no idea! But I’ve looked into this chapter, read some articles about it and here is my info about this german-kinda-problem-thing:

    After 22 years after reunification persist between East and West Germany in the economic field of large differences. It results from the annual report presented by the Berlin Interior Minister Hans-Peter Friedrich. According to the document, the convergence process stopped. Gross domestic product in the former GDR amounted to 73 percent of the West. Over the last year has not significantly changed. The number of unemployed dropped below a million, but according to Interior Minister Friedrich is still twice that in the old Länder. The differences are in terms of the amount of salaries or pensions. The average wage of East Germans is 83 percent of what they earn in the west. In recent years, sparked a debate about the so-called solidarity contribution. New Land of the financial resources continue to demand that could be compared to living conditions in 2019.

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  2. In Slovakia:
    The difference between a person earning the average salary in Bratislava and Prešov region is 339 euros. Not only salary, but work is precious little to the east.

    Citizen in Bratislava in the first half earned an average of 1,054 euros per month,citizen in Prešov only 715 euros. Differences in pay between the regions are larger than in the private sector in state and municipal companies.

    People who work for state and local government sector, the regions have lower salaries than men in Bratislava, from 2 to 19 percent.

    The Bratislava region are in the public company salaries by 2% lower than in the capital, but in Košice and Prešov regions are up to 19% lower.

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  3. In my opinion this is a very important problem of the german labour market. I am from Germany, so I’m familiar with this topic. Since the reunion of eastern and western Germany the differences between salaries have slightly decreased. However there is still a big difference between east and west, which shouldn’t exist. Therefore I think, that the german government should focus more on this problem in the future.

    Reply

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