- Labour market East and West: perceived disadvantage
On the job market, the East in Germany has been catching up significantly over the years. However, in terms of wages and productivity, the West still has an advantage. According to a paper presented in Gütersloh by the Bertelsmann Foundation, it's therefore not surprising that more Eastern Germans than Western Germans feel disadvantaged in terms of living standards.
The average wage in the East is 3,157 euros, compared to 3,752 euros in the West. While the wage level has been converging over the decades, the gap was still 26 percent after reunification in the 1990s. Today, people in the Eastern federal states earn 15.9 percent less for their work than in the West.
The Bertelsmann Foundation attributes this to the differing productivity levels. While progress has been made in construction, retail, and services, the East is still at only 76 percent of the West's level in manufacturing, 35 years after reunification. To address this, the authors call for the attraction of major companies. "Large companies create space for research, regional suppliers, and business-related services," the paper states, adding that this fosters better-paid jobs in future-oriented professions.
The figures for the labor market in East and West are almost equal or converging. The employment rate in the East is 76.7 percent, compared to 77.3 percent in the West. The unemployment rate in the East is currently 7.2 percent, down from nearly 19 percent in the years following the 2000s. The West's current unemployment rate is 5.3 percent, still below the East's. The share of long-term unemployed is the same in both regions, at 34 percent.
According to the Bertelsmann Foundation, the high unemployment and exodus of young people after the 1989 revolution have left a lasting impact on collective consciousness. "The effects are still felt today, as public infrastructure in rural regions continues to decline, and many of those who were unemployed then now face old-age poverty. This contributes to the perception of still being disadvantaged – even though the Eastern German labor market is in a much better position than it was 30 years ago," says Eric Thode, labor market expert at the Bertelsmann Foundation.
Despite improvements, Eastern Germans still earn 15.9% less than their Western counterparts, a disparity that persists even three decades after Germany's reunification in the 1990s, which saw a wage gap of 26%. (First sentence)
The proposed solution to bridge this gap, according to the Bertelsmann Foundation, involves attracting major companies to the Eastern states, as these corporations foster research, support regional suppliers, and generate better-paying jobs in future-oriented professions. (Second sentence)
