The German sruggle with a Minimum Wage

The concept of minimum wage has long been commonplace in many countries in Europe. In all but a handful of countries, these rates provide a standard of living that is close to (or even below) subsistence levels. Denmark, Finland, Italy and Sweden do not operate national minimum rates, but nevertheless have minimum rates set through sectoral collective agreements that jointly cover a high proportion of the working population. But in Germany the introduction of a minimum wage is for many years an ongoing debate. When it comes to shaping their pro or con arguments over whether the country should adopt a minimum wage, it doesn’t take long for the experts debating the issue in the German government to start looking beyond the country’s borders.

Advocates for the introduction of a minimum wage in Germany argue from a platform of social justice and existential security. But opponents to the plans say they would be counterproductive as jobs which pay less than the minimum wage would be cut, and unemployment would be pushed up even further. The counter argument, however, is that the subsistence level in Germany is secured through social welfare benefits and unemployment payments.

Nevertheless, while the majority of the population is in favour with the introduction of a general legal minimum wage, within the Federal Government is still argued from a contrariwise point of view.

As a political compromise, at the end of January 2009 the parliament voted to extend legally binding basic pay to six sectors. Thus, besides construction, janitorial and postal sectors Germany will operate in future statutory minimum rates in the security,  nursing, mining, waste removal and laundry sectors.

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One thought on “The German sruggle with a Minimum Wage

  1. There are indeed some jobs which are not paid very fair, e.g. nursing. But I think a minimum wage in general is a to heavy intervention in the free economy. You have mentioned some disadvantages. everybody can decide if he/she wants to work to the real wage.

    Reply

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