More than 33 years after the reunification of Germany, wage gaps persist for workers in the former communist East Germany and the wealthier capitalist West Germany.
Structural economic differences in the different parts of Germany account for two-thirds of the wage gap, according to a new study from the ifo Institute released.
"Many people in the East work in typical low-wage industries, and well-paying large industrial companies are hardly represented here" in the former East Germany, economist Jannik Nauerth of the ifo Institute's branch in the eastern city of Dresden said.
Last year, workers in the former West Germany earned an average of €31.40 ($33.12) per hour, while workers in what was once East Germany earned an average of €26.60.
However, if structural economic differences are taken into account, then the East-West wage gap shrinks from 15% to 5%, said ifo economist Joachim Ragnitz.
He said those figures suggest that proposals from Germany's centre-left government for more workers in the former East Germany to be covered by trade union collective bargaining contracts wouldn't do much to help close the gap.
Many smaller firms aren't covered by collective bargaining deals, he noted.
Ragnitz said it remains to be seen whether a recent investment boom in factories in the former East Germany from major multinational corporations like carmaker Tesla and chipmaker Intel will do much to close the long-term gap.
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