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
- 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