FRG and GRD united – but what about the wages?

Since 11 years Germany is united again. With the fall of the wall, which separated East and West Germany, the country is reunified again. Geographically Germany is one big country not longer separated into and GDR but if one looks at the regions in Germany one observe structural differences in the labor market. People living in the Western part earn way higher salaries and wages than the one living in the Eastern part. Additionally the unemployment rate is way higher in the East than in the West. Therefore the East representative of Germany, Wolfgang Tiefensee, demanded a minimum wage of 7.50 Euro for different branches applicable in whole Germany to fulfill the reunion. The main purpose in the East is to form new jobs in the Industry and to stabilize new jobs in small to medium sized companies. There is a lack of new and high tech industry in the eastern regions of Germany if one compares FRG and former GDR with each other. Moreover Research and Development must be extended in the Eastern part and the support of export goods out of that part of Germany must be extended as well. Looking at the salaries the wages developed in the Eastern part of Germany way poorer than the one in the Western part. There is a striking gap between these two parts especially if one takes the differences in salaries for woman into account. A hair dresser working in Sachsen earns about 5 to 7 Euros per hours. If the same person would work in Bavaria she would earn 3 times more. The difference in wages belongs to the fact that Sachsen for example is close to the Polish border. Therefore many polish worker come over and take the job of East German worker because they are able to work for lower wages then most of the Germans are able to because the living costs in Poland are way lower than the one in East Germany. Another reason why the wages in different regions are so different is the fact, that with the unification of FRG and GDR most of the people who live in the Eastern part of Germany immigrated to the Western because of better living conditions. With the reunion every german has to pay a “Solidaritätszuschlag” out of their salary to support the Eastern part of Germany – still 11 years after the fall of the wall. But this is still needed: The immigration to the Western FRG is still common, because of the fact, that most companies leaving Eastern Germany to produce in nearby Poland. There they can produce their goods even cheaper and so the margin gets even higher. But still, the unequal behavior of employers must be abandoned. Even the living conditions in the East might be not as good as they are in the western part of Germany but such a striking gap in wages cannot be accepted. For sure there must be a slight difference in wages. Renting a 1 room flat in Munich for example costs about 600 Euros while in Dresden it costs about 200. Also one has to consider that the big difference support the immigration from East to West more and more. It is not just the short term problems which occur. The long term are even worse. How can a hair dresser working for 5 Euros an hour save a little bit of her money for her retirement? How can a men working for a third of the money he would gain in the Western part provide his family and enable his children a higher education? Therefore the proposal of Tiefensee is in my opinion a good one: Stopping immigration and emigration of Firms by introducing a minimum wage applicable in whole Germany.


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