Would a Slavic pagan in Pomerania be better-off under Catholic German rule than a Jewish German would be? Were Jews treated just as poorly as polytheists? Was there any tradition in German and Eastern Europe at all resembling the Islamic concept of Dhimmi?
Jewish settlement along the Baltic was very minimal at this time. Most Jews in Eastern Europe were itinerant merchants. The first documents we have indicating Jewish settlement are from the 14th century (earlier tombstones exist further to the south). Before this, Jews would typically only be in the region to trade and thus were invited in. Christian rulers aimed to subdue and convert indigenous pagan populations (which primarily remained further north east of this region by the 13th century).
Catholic is an anachronistic term in this period.