The enlargement of the European Union in May 2004 by ten new member states bear increasing challenges in creating social cohesion among its citizens and regions. Social cohesion is understood here in a broad sense as a coalescence of European societies in such a way that living conditions and quality of life of its citizens converge. This paper?s empirical focus is on the two core life domains that are currently taking center stage in EU policy debates: (1) employment and working conditions and (2) economic resources and social exclusion. The analyses show that the 15 former member states are converging in terms of lliving and working conditions and the situation has improved in all of these countries during the 1990s. With the enlargement the situation becomes more diverse in the enlarged EU. In particular the postsocialist countries have to make great efforts to catch up with their EU counterparts. We can identify three emerging clusters of countries that share empirically very similar living standards. The first, wealthy cluster consists of the old northern European member states. The second, intermediary country group contains the most well-off accession countries and the old Mediterranean member countries with a lower living standard. The third, less developed cluster embraces new member states that were former post-communist countries.