Germany: persistent East-West pay gap

According to a survey by the Hans Böckler Foundation (trade unions) released two days ahead of Germany’s national unity day, and almost thirty years after the fall of the Berlin Wall, employees in the east of the country continue to earn much less than their colleagues in the western Länders. For a given qualifications level, professional experience, profession and gender, the east-west pay gap amounts to 16.9%. The pay differential is even greater for employees having undertaken occupational training or having achieved additional professional training qualifications, while it is less pronounced for university degree holders. Inter-Eastern Länder disparities also exist with pay gaps ranging from 13.9% in Brandenburg to 18.2% in Saxony. The survey’s authors argue that the gaps are due in large part to the low number of companies from former East Germany operating under collective agreements. While trade unions have certainly succeeded in harmonizing salary levels within collective agreements these arrangements do not apply to companies operating outside the collective agreements. According to the IAB (the Institute for Employment Research), in 2018 only 45% of east-German employees were paid according to a collective agreement. The corresponding figure for West Germany is 56%.