Legislative body urged to take immediate action by DGB
In a recent report by the Federal Ministry of Labour, it was revealed that the average income difference between western and eastern Germany stood at €699 per month in 2019, with western employees earning an average of €3,526, compared to €2,827 in the east. This disparity represents a 19.8 percent lower income in eastern Germany compared to western Germany.
The German government, in collaboration with the German Trade Union Confederation (DGB), is taking active steps to address this issue. The primary focus is on increasing the minimum wage and advocating for fair collective bargaining agreements.
One such initiative involves a planned gradual increase of the national minimum wage, currently at 12.82 euros per hour. This wage is expected to rise to 13.90 euros at the beginning of 2026, with a further increment the following year. This move aims to improve income levels broadly, indirectly helping reduce regional wage disparities while elevating the lowest earners’ wages overall.
The DGB and affiliated unions like the Food, Beverage and Catering Union (NGG) are also actively campaigning for better wage agreements, including minimum standards in collective bargaining. For instance, delivery drivers for companies like Lieferando, who currently earn the minimum wage, are pushing for legally binding tariff regulations to secure fair wages and conditions.
However, broader economic policies, such as limited tax relief for ordinary consumers and a focus on rearmament spending, may constrain resources available for direct wage convergence policies. The government has notably restricted cuts to electricity taxes mainly to large companies rather than the general population, which can impact cost of living differences between regions and thus influence disposable income disparities.
DGB chairman, Reiner Hoffmann, is urging lawmakers to take action regarding wage disparities between western and eastern Germany. He criticizes the use of OT memberships (memberships without collective bargaining coverage) by many employers in the east and identifies the lower level of collective bargaining coverage in the east as one of the problems. Hoffmann proposes that only companies paying collective wage agreements be eligible for public tenders and demands legal safeguards if employers do not stop using OT memberships voluntarily.
While there has been a slight decrease in income disparities between 2018 and 2019, with wages and salaries in eastern Germany increasing by €120 per month compared to €92 in western Germany, Hoffmann asserts that this does not align with the goal of equal living conditions in Germany. He describes the 30 years of German unity as a success story with dark sides, highlighting the significant difference in working hours and wages between the two regions.
Hoffmann suggests making it easier for collective bargaining agreements to be generally binding as a means to address these issues and ensure fair wages for all regions of Germany. As the efforts continue, it remains to be seen how effectively these measures will close the income gap between eastern and western Germany.
The German government, in partnership with the DGB, is advocating for increased minimum wage and fair collective bargaining agreements to address the income disparity between western and eastern Germany. DGB chairman, Reiner Hoffmann, is urging lawmakers to take action, particularly regarding the use of OT memberships by employers in the east and the lower level of collective bargaining coverage, as means to ensure fair wages for all regions of Germany.
