East-West German income gap widens to 7,247 euros as economic convergence stalls 36 years after reunification

Widening income disparity

Thirty-six years after German reunification, official data shows persistent and growing economic divides between eastern and western federal states. According to figures from the Federal Statistical Office requested by the BSW party, eastern German households including Berlin had an average annual disposable net income of 42,259 euros in 2025, compared to 49,506 euros in western Germany. This difference represents an income deficit of 7,247 euros for eastern households, widening from deficits of 7,080 euros in 2024 and 6,979 euros in 2023. The calculation encompasses all income streams, including wages, pensions, rental yields, and capital gains, after deductions for taxes, social security contributions, and private transfers.

BSW founder Sahra Wagenknecht criticized the widening economic division on the anniversary of reunification.

The fact that income differences between East and West are growing again is an indictment of politics on German Unity Day. Over 7,000 euros less income per year for eastern German households is not a small difference, but a bitter record after 36 years.

Regional disparities across federal states

Net household income levels continue to show sharp regional variation across Germany. In 2025, Saxony-Anhalt recorded the lowest average disposable net household income among all federal states at 38,284 euros, followed by Saxony at 39,500 euros. While western states generally lead the ranking, the western city-state of Bremen placed third from the bottom at 39,955 euros, behind Mecklenburg-Western Pomerania at 40,818 euros, Thuringia at 42,959 euros, Brandenburg at 45,569 euros, and Berlin at 45,646 euros. At the top of the scale, Bavaria led all states with an average net household income of 53,067 euros, followed by Baden-Württemberg at 51,923 euros, Hesse at 49,538 euros, Rhineland-Palatinate at 48,813 euros, and North Rhine-Westphalia at 48,455 euros.

Household wealth and demographic shifts

The economic division extends beyond annual earnings into accumulated personal wealth. Federal Commissioner for the East Elisabeth Kaiser reported that average net household wealth in eastern Germany stood at 125,500 euros in 2023, compared to 257,100 euros in western Germany. Real estate wealth showed a wide contrast, averaging 97,800 euros per eastern household against 214,500 euros in the west, reflecting the lack of private asset accumulation during the communist era. Although gross monthly earnings for full-time employees in eastern states quadrupled since 1991 while western wages doubled, a gross monthly difference of 840 euros remains. Demographically, 57% of people who moved away from eastern Germany between 1991 and 2024 were women, mostly under 25 years old. An estimated 18,000 more individuals moved from the west to the east between 2017 and 2022, but that net flow reversed after 2023.

Economic convergence stagnation

A study by the Cologne Institute for Economic Research (IW) based on its convergence index indicates that eastern Germany's economic catch-up process has largely stalled. In 2025, the economy across the five eastern territorial states reached just under 79% of the western level, compared to roughly 78% in 2024. Several structural metrics have regressed over recent years. Eastern labor force participation dropped from nearly 89% of western levels in 2010 to just over 85% in 2025, while research and development staffing reached just over 46% of western levels. Capital stock per resident (measuring machines, factories, roads, and buildings) moved from nearly 77% of the western baseline in 2010 to just over 79% in 2025. While eastern regions have attracted industrial projects such as the Tesla plant in Grünheide and semiconductor facilities in Dresden, demographic models project that the eastern population could shrink by more than one-fifth by 2045 without immigration.