The minimum wage is an issue in the election campaign. The SPD and the Greens want to bring it to twelve euros, the other parties do not. But who would really benefit? A new study shows that there are certainly some surprises here. And that women can expect more money than men.
Since July, a minimum wage of 9.60 euros (after 9.50) per hour has been in effect in Germany. No employer is allowed to pay less, except in exceptional cases, such as to certain trainees or initially to people without a job for a long time. According to the recommendation of the independent commission set up by the government, the minimum wage should increase in stages to 10.45 euros by mid-2022. With the current 9.60 euros, a person working full time comes to around 1600 euros, before deductions. Those who have to pay rent alone in cities often have a problem. It also becomes financially difficult for other employees.
Who benefits exactly when the SPD and the Greens win, claiming twelve euros an hour in the election campaign? First of all, they are surprisingly numerous: up to ten million German citizens who earn less today. This is what the Minister of Labor Hubertus Heil (SPD) says, which is based on data from the Federal Office for Statistics and scientific discoveries. And there may be more. Because a higher minimum wage also benefits some employees who already earn a little more. For example, because companies offer them more money so that they do not jump in when new offers arise as a result of the general increase in wages.
And which employees benefit directly from it because they now receive less than twelve euros an hour? It is not only restaurant and supermarket workers who are known to be poorly paid. “Unfortunately, even comprehensive, multi-year vocational training does not reliably protect against low-wage employment,” reports Malte Lübker, who assessed the salaries of 200,000 employees for the Institute of Economic and Social Sciences (WSI) . Result: hairdressers, bakery salesmen and florists are well ahead of the 50 professions for which the most common remuneration is less than twelve euros. In other words, jobs that require three years of training. And then that moderately earned.
Other popular apprenticeships are also emerging: automotive mechatronics technicians or employees in medical practices, law firms, stores and corporate offices. “In other words, a lot of people who, due to their solid education, would have been part of the middle class in the past,” Lübker said. Previously? What has changed is that at the turn of the millennium, companies were paying more than two-thirds of their employees according to collective agreements. Today, only one in two people can benefit from the generally higher wages that a contract negotiated by a union brings. Others slip more easily than before, in training or not, towards poorly paid jobs – and would benefit from a minimum wage of twelve euros.
According to a study, many mini-jobs would be deleted
In general, no one is immune to earning little for a short or long period of their working life, Lübker warns. But there are risk factors. One of them is clearly the genre. Women more often have to bear low wages, especially if they work part-time or have only a fixed-term contract. Thus, more often than men, they would earn a higher minimum wage. Those who work as helpers or have been trained also have a higher risk of low wages. Whose company has less than 100 employees. And anyone who lives and works in the east or north of the Federal Republic. As a result, if more than one of these factors apply, they often earn little.
At first glance, there are a lot of profiteers of a higher minimum wage, as proposed by the SPD and the Greens – and also the left, which even asks for 13 euros an hour. But aren’t there tons of jobs lost with such a state-imposed pay rise, which is why those affected would not benefit at all? This issue has been at the center of the political discussion from the start. When the statutory minimum wage was introduced in 2015, liberal market economists warned it would cost hundreds of thousands of jobs. Which turned out to be completely wrong.
However, raising the minimum wage to twelve euros is not an infallible success. Because the introduction in 2015 coincided with years of good economic activity and falling unemployment figures. In 2020, however, the corona pandemic caused the second-worst economic downturn in post-war history, from which the country will not fully recover until this year. There are still a few hundred thousand more unemployed than before the crisis.
Some economists therefore suggest that the minimum wage should be increased slowly to avoid job losses. Tom Krebs and Moritz Drechsel-Grau of the University of Mannheim arrive at more optimistic results in a new study. Thus, total employment would not decrease if the minimum wage gradually rose to twelve euros. Many mini-jobs of up to 450 euros would be cut, but full-time and part-time jobs would be created.