August 25, 2009

Prosperity In Eastern Germany Almost Reaches Western Levels

German reunification has made better progress than reflected in the mood of the population in both the eastern and western parts of the country. Twenty years after the fall of the Wall, the standard of living in the eastern part of the country (formerly GDR) has almost reached that of the western states, according to a study undertaken by Professor Dr. Klaus Schroeder, head of the Research Center on the Socialist Unity Pary (SED) State at Freie Universität.

According to this study, the average standards of living in eastern German households have "reached, and in some areas even surpassed, those of western German households with regard to consumer durables and also housing in general." Schroeder sees particularly the pensioners in the eastern part of the country as being the winners of unity. "Rather than 30 to 40 percent of average earnings during GDR times, they receive 80 percent, sometimes even over 100 percent of their average earnings during GDR times as statutory retirement payments." Children and young people in the eastern states have also profited from unity. Due to a significant increase in higher educational qualifications, many of them have better future prospects compared to the situation at the end of the GDR era. "The proportion of high school graduates to those leaving school every year has nearly tripled compared to 1989."

The study shows that real net monthly earnings for eastern German employees roughly doubled between 1991 and 2007/2008. According to Schroeder, real net monthly earnings of eastern German laborers rose by - depending on marital status - 60 to 80 percent, "an unprecedented explosion of prosperity."

Across the social strata the adjustment in the eastern states has progressed at different rates. According to the study, one-person households and households of couples without children are more likely to be further from the western German average. Single parents, couples with older children, and particularly pensioners and recipients of benefits come closer. A "wealth gap" between East and West, however, still exists in the upper income classes. Unemployment is still significantly higher than it was in West Germany before unity.

The study shows that "despite the material adjustment process, more East Germans are dissatisfied with their lives than West Germans." They do not judge their current situation in comparison with their past situation, i.e., with conditions in the GDR in the 1980s, but rather in comparison with their overestimated impression of prosperity in the West. "What they achieved so quickly is underestimated by many, and what they lost is viewed nostalgically through rose-colored glasses."

The study was prepared at the request of the Initiative New Social Market Economy and the newspaper SUPERillu.


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