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The Collapse of the GDR Economy (January 11, 1990)

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Labor Resources, Vocational Recruitment, Living Standard
Ineffective Employment Structures Created

At the end of the eighties, demographic developments in our country created conditions unfavorable for reproduction of labor resources in society. Until 1988, the working-age population grew only slightly. With the mass emigrations of 1989, the labor force shrank decisively. Emigration continues. At the same time, the number of young skilled workers completing vocational training decreased. The course of administrative reforms and other changes in state institutions, parties, and mass organizations revealed an ineffective employment structure. Labor that is becoming available has qualifications different from those needed for the approximately 250,000 jobs presently available.

Social policy consumed a large share of the overall economic product, without sufficiently stimulating production. The population's net income from 1986 to 1989 exceeded the plan. During the same period, retail turnover fell short of the target. Economic production lagged behind income. Supply of goods and services did not correspond in structure, quality, or quantity with buying-power demand. A significant surplus of purchasing power resulted from the disproportionate relationship between savings and available goods. [ . . . ]

Regarding monetary income from employment, the incomes of blue- and white-collar employees and collective-farm workers have developed most quickly since 1980. In other employment groups, measures established in 1986 to promote individual crafts were particularly effective. Overall, however, income differences changed only slightly after 1980. The average net household income of blue- and white-collar workers rose 30.6 percent after 1980, totaling 1,946 marks per month in 1988. Per capita net income was 696 marks a month (1988).

Though increasing production of consumer goods made more food and industrial products available to the public, the range and quality of products lagged behind consumer expectations. [ . . . ]

Source of English translation: “SED Disclosures of Economic Decline” (January 11, 1990), in Konrad Jarausch and Volker Gransow, eds., Uniting Germany: Documents and Debates, 1944-1993. Translated by Allison Brown and Belinda Cooper. Berghahn Books: Providence & Oxford, 1994, pp. 98-101. © Berghahn Books

Source of original German text: Neues Deutschland, January 11, 1990.

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