Germany: A State Wealth Comparison

On That Research: Examining State-by-State Conditions

A while ago, I posted a preview on preliminary research towards provincial/state differentiation in countries with either regionally divided history and/or diffusive outcomes based on geography. I am proud to present both a shitty graph and some brief notes of value on this very subject now, with the first segment spotlighting Germany. I hope to further expand this project in the near future, making it more academically inclined AND inclusive of other countries in both the developing and the developed world.

________________________________________________________

First up is Germany, whose split-nation history and subsequent differential development still lingers alongside emerging divides on new geographical fronts.

NOTE: Both the population numbers and the GDP numbers are dated by a few quarters in an attempt to avoid changes due to the COVID Pandemic. Also sorry for the blurriness :|

East-West Divide: Certainly More Than Name Only

The brief history of Germany post WW2 essentially boils down to the line in black: The former border between West and East Germany, based on where Western Troops invaded Germany to the West and by the Soviets in the East. The big exception here is the now-Capital Berlin, itself split down the middle despite being in central East Germany, an unusual political and social history that makes it stand out for a variety of reasons (and is certainly a contributing factor to it being the now-wealthiest state in the former East). For most of my analysis, I will exclude Berlin from East German calculations due to the above as well as its capital status, which has resulted in a flurry of Western resources, culture, and people, an evolution far more magnified than any of its surrounding states. And it is worth noting that the smaller quasi-city states themselves are a sharp income anomaly compared to the vast majority of states and overall population.

Fun Fact: When it came to development, democratic West Germany was (obviously) much wealthier, although East Germany did have a particularly progressive outcome when it came to gender equity: Women in the communist states had a much smaller wage gap and themselves were much more likely to work. This pattern has held going into reunification, although it is further eroding as the years go on in unified Deutschland.

German History: A Lot Even Without the Nazis!

Economically, the numbers speak for themselves: Every single one of the poorest states (excluding Berlin) in Germany resides East. Of course, East Germany retains a much smaller population (much of that shrinkage hearkens back to economic migrants moving to the affluent German West pre and post-unification), but holding for this- and once more excluding Berlin, the average income is 35k for East Germany, 4,000 lower than West Germany’s poorest state up north: Schleswing-Holstein at 39,773. Although much of this wage differentiation occurred due to differing economic development, reunification itself was also an accompanying negative factor. As opposed to an developmental renaissance that would fill the former Soviet bloc with higher wages and wealth, East Germany followed on the Eastern Sphere trend of collapsing wages and industry as it opened up to a model of development both entirely foreign to it and much more efficient. The well-reported raiding of resources and products by the Western allies post-reunification also strengthened the divide but in a newer unhealthier light: as opposed to just growing inevitably, the East now shrank at the expense of the West’s continued growth. Needless to say, the evidence speaks for itself: This difference lingers, yet others are emerging as well...

Regionalizing like its Italy: The New North-South Divide

Demarcated by the Yellow Line, this author notes a burgeoning North-South Divide beginning to arise (based on prior findings by the Economist here). While that journal splits Germany along the Uerdingen Line (see accompanying graphic) and notes vastly different crime, health, government, and overall life outcomes, for the sake of this amateur analysis and its effort to more easily highlight a point, my line is er...simpler. I view this divide mostly along the former West Germany’s lines, with Baden-Wurttemberg and Bavaria embodying the South and the North as well, everything else. This is not just a minimal trend either, as

Props to the Economist for doing my research for me

the collective population of Germany’s South makes up over ¼ of the country’s total population (by the Economist’s Line, it would be ½) and certainty is its wealthiest. Other than the uniquely affluent Bremen City-state, the South enjoys the wealthiest averages. They are also some of the geographically largest and the 2nd and 3rd population wise, meaning they are sure to have influence and boy, do they. The national Christian Democrats’s political and coalitionary-partner the CSU, is based in Bavaria, meaning its influence, and notably more rightward leaning (for Germany, that is) social and economic policies bear an enormous impact on the rest of the state. Is it purely policy and population driving these differences? The Economist pins down the success as mostly due to big firms better weathering industrial decline and the region's inclusion of top tier universities. Based on my own look at trends and political coalitions, I would have to agree. After all, Germany’s confusing coalition governments (meant as a counter-incentive to anymore nazificating politics post-Hitler) offers little hint towards causation without a very deep look. Especially in regards to the Economist’s Line (where the wealthiest Eastern States are grouped within the South), this one is a divide to follow into the future!

Keep an Eye on This Immigration Correlations...

Moving a bit beyond just number crunching with the graph, I was interested in some external trends that would have an effect on both population and income, namely demographic developments. This was majorly influenced by Germany’s decision to take in over 2 million immigrants in 2015 alone. As was clear domestically and internationally, there has been a sharp push back via strain on resources and cultural cohesion. But what do the numbers say of these occurrences? See the following table for overall growth conclusions by state (note Southern states mentioned are marked with an S while Eastern is with E):

It shouldn’t be very surprising that the wealthier states attracted more immigrants while those that were not had far less. Indeed my research reflects that as the most immigrant-packed states are wealthy Bremen, Hesse, and Hamburg (in Yellow) while those of the lowest are Thuringia, Saxony-Anhalt, and Mecklenburg-West Pomerania (Purple); all of whom rank near the bottom income-wise and are in the former East. Beyond that, after extensive research, it became clear that Germany’s immigration boom is too recent to make any sort of larger economic conclusion. Indeed, much of demographic transitions and certainly the effect of immigrants will take awhile to be fully understood, for both family capacity, generational mobility or the lack thereof.

With that in mind, I name those states as a means for case study down the road. With Germany’s population growth abysmal even for Western Europe, almost any increase will come from those immigration patterns (excluding some internal movement to say, the affluent South or Berlin). The economic trajectory down the line for these states will speak to whether Germany’s big immigrant push will be a success in both economic mobility and cultural assimilation, or a failure embodied by the creation of segregated and impoverished neighborhoods of the ‘other.’ This is the likes of which we have so cruelly seen developed in other European countries like France and Belgium. This is an immigration trend likely as close to US-style of development that there will be, so it will be a great point of comparison for our continually diverse country as well.

Germany's Immigrants: A Lot Left to Determine

Sources Cited

Statistisches Bundesamt (Destatis)

The Economist

IMF Statistics