A History Shared and Divided. East and West Germany Since the 1970s

(Rick Simeone) #1

SOCIAL SECURITY, SOCIAL INEQUALITY 223


portance of property ownership in the past, East Germans are not nearly
as likely to profi t from an inheritance as West Germans are. Inheritance,
therefore, has continued to reinforce existing inequalities in wealth.^67



  1. Unlike the other former communist bloc states, the old East Ger-
    many was able to merge into a functioning system of welfare institutions
    after 1989/90. Thanks to the enormous infl ux of fi nancial transfers and
    administrative expertise, the social implications of the system transfor-
    mation in Germany’s new federal states resulted in less harsh structures
    of inequality than in the majority of the other eastern European states.
    Despite high unemployment and increasing income disparity, the dis-
    tribution of income in Germany is still much less unequal than in most
    European countries.^68 This can be seen as evidence for the continuing
    eff ective hedging of the markets by employment relations, fi scal policy
    measures, and the social security system. However, the social transfor-
    mation process in the new federal states was radical, and it turned out
    to be much “more diffi cult and cumbersome than initially supposed by
    many.”^69 The way in which this process was entangled with waves of
    global economic and sociostructural transformations sometimes resulted
    in changes in social inequality in post-reunifi cation Germany that varied
    greatly by region and whose causes were not always easy to locate. Most
    of the citizens of the new federal states found themselves facing a sig-
    nifi cant increase in insecurity and inequality on the one hand, but also a
    substantial improvement in their standard of living on the other.
    At the end of this reorganization process, in which the East German
    states lost approximately four million jobs, a social fabric comprised of
    diff erent layers had emerged that more closely resembled that of West
    German society than before, but nonetheless retained some of its East
    German particularities. For example, gender inequality is still less pro-
    nounced in these states. Likewise, material inequality is not as strong as
    in the old West Germany. What cannot be overlooked, however, is that
    the overall level of affl uence in the former East is still lower than in the
    West. The unemployment quota in the new federal states is much higher:
    it averaged about 11.6 percent in 2013, which was almost double that of
    the old federal states. Of course, this has implications in terms of poverty.
    A larger number of the regions with particularly high poverty rates are
    located in the eastern federal states.^70
    As part of the system transition, East Germany had only had a very
    short time to achieve the economic structural transformation that had
    taken more than twenty-fi ve years in West Germany. Over the course
    of the deindustrialization process, a large number of companies had al-
    ready been forced to close their doors or rush to adapt to market society.
    Many of these businesses, which were tightly knit social communities in

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