fJuly 1st of this year was a historic day for pensioners in East Germany: Since then, they have received the same amount of pension for every pension point acquired during their working life as their fellow citizens in the West: 37.60 euros. A good three decades after German reunification, the pension system has finally been standardized. The annoyance about unequal treatment that has grown steadily over the years has not gone away, however, because significant differences remain. For East Germans, the statutory pension is often the only old-age provision. Private or company pensions are much rarer than in the West, and the same applies to owning real estate.
In addition, the generation that is now retiring in the East has been able to collect comparatively few pension points. The massive economic crisis in East Germany after 1990, during which the gross domestic product fell lower than during the global economic crisis in the 1920s, led to precarious employment conditions, immensely high unemployment and low wages, leading to broken employment biographies for millions of people, which today at best result in minimum pensions – with all the consequences for self-esteem to poverty in old age, which will be much more widespread than in the West for many years to come.
Cheap locations in the east
A look at the wages paid in East Germany today reveals that not much will change in the future, on the contrary: the differences are even growing again. According to the Federal Statistical Office, workers in the east received an average wage of 12,200 euros less than in the west last year. The wage gap was thus a good 200 euros larger than two years before, and that in some cases with significantly longer working hours. In the manufacturing industry, people in eastern Germany work around three hours longer and in the public sector up to one and a half hours longer than in western Germany.
In many cases, the economic structure established after reunification, consisting of West German parent companies and East German subsidiaries, is decisive. All too often the latter are looked down on as cheap locations which, when things don’t go well, are easily abandoned. In Sonneberg, the district that recently made headlines with Germany’s first AfD district administrator, almost half of all employees are now earning the minimum wage, more than anywhere else in Germany. The descent from the once respected center of the toy industry to an outdated region with a difficult future within less than a generation is particularly drastic here, although not unusual for many East German regions.
This is no justification for voting for a party that obviously has no prescription against it, but it may explain part of the difference in the election results that right-wing populists also achieve in the West. Thus, decisions are regularly made about eastern locations that one would often not dare to make at the western headquarters.
Bosch, for example, pays employees 3,000 euros to compensate for inflation – but only in the West, the 500 Dresden employees get nothing. The Hassia Group, Germany’s second largest mineral water producer, also left its three eastern locations unconsidered in the latest tariff increase. Only a massive protest led to the fact that the employees in the east also receive inflation compensation and their wages are now to be adjusted by 2027 (!).
Pure existential fear
The fact that people are fighting back against such practices is also new in the East. For three decades, the experience of unemployment, social decline and sheer existential fear made many workers quietly endure a great deal of injustice. Younger employees in particular, however, no longer want to be offered this, they set up works councils and mobilize workforces. Recently, employees of the pasta manufacturer Riesa in Saxony went on strike in front of the headquarters of the Swabian parent company, where employees receive 700 euros more per month for the same work. The result, after months of fighting, was a compromise, but one that didn’t eliminate the feeling of being a second-class citizen.
The objection that can still be heard that life is cheaper in the East has never been so generalized anyway. Gas, electricity and water are up to 15 percent more expensive almost everywhere in eastern Germany, which, in view of lower wages, leads to existential fears and corresponding resentment much more quickly and frequently, especially when it comes to energy policy.
At best, however, this knowledge is also lacking in political decisions affecting the East; at worst, it is simply ignored. Points like this show that the demand for more East German representation in federal German institutions is no trivial matter. A solution should therefore not take as long as it did with the pension.
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