From 1 January 2015, the statutory minimum wage will be introduced in Germany. Hardly any other draft law has caused as much discussion in recent years as the mark of 8.50 euros as the lower minimum wage for employees. Opinions on the effects differ widely.
While employers predict a slump in the labor market, trade union circles expect the economy to be stimulated by more consumption. Neither – as a study by the German Institute for Economic Research in 2013 showed – is unlikely to happen. According to the experts, the effects of the law will vary greatly in the individual economic sectors as well as regionally.
Who are the main people affected?
The epicenter of the wage quake is in the crafts and service sector. While in large companies and administrations the minimum wage is not a question of the main occupation, many small companies are dependent on inexpensive labor in order to survive on the market at all. Especially in the hairdressing, gastronomy or retail trade, companies stand and fall with the wages they have to pay. Significantly, there have been no minimum wages customary in the industry so far. But the adjustment will also be problematic in areas such as building cleaning or the care industry, whose lower limit was previously less than 8.50 euros per hour. Here, many companies already undermined the minimum rate of 7.50 euros per hour defined by the federal government in 2012 for temporary workers by engaging subcontractors from outside the industry. Even large fast food chains, which are only partially affected by the increase in lower wages, are coming under pressure from the new wage structure. This is because many managers will file new claims if the waitress at the counter earns the same income as the shift supervisor.
In total, the study by the German Institute for Economic Research assumes that around 5.6 million employees will benefit from the wage increase. These are predominantly mini-jobbers (54%) and unskilled workers (34%), i.e. employees whose opportunities on the labour market have so far been achieved through wage dumping. This is where the toughest cuts in employment are likely to be expected.
Legally secured wages – a step forward?
Until now, wages have been part of the autonomy of collective bargaining. Opponents of the minimum wage also see this as a contradiction to the Basic Law. However, the trend towards the minimum wage in Europe cannot be overlooked. In France, it has existed since 1950 with an annual adjustment to economic developments. It is currently 9.53 euros per hour worked. Other countries only partially cover the lowest wage. In Switzerland, for example, only 40% of employees have a guaranteed minimum hourly rate. An initiative for nationwide introduction failed in May 2014 – probably also because of the demand for 22 SF per hour of work. In most European countries, minimum wages apply that are far below the German value. In six Eastern European countries, the amount does not even exceed 2 euros.
The federal government not only sees the introduction of the minimum wage as a general necessity, but also wants to further promote German unity. After all, the new regulation affects more than a quarter of employees in eastern Germany (about 15% in the old Länder). In this respect, it can also be assumed that the provision is permanent. There is a three-year transition period and a number of exceptions that leave room for manoeuvre in companies and on the labour market.
What are your experiences? We look forward to your comment
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