2024-08-16 13:46:55
The statutory minimum wage has been in place for almost ten years. In East Germany, wages have risen significantly since then.
According to an analysis, the statutory minimum wage has significantly increased the income of low earners, especially in eastern Germany. This is the result of a study by the Economic and Social Science Institute (WSI) of the Hans Böckler Foundation in Düsseldorf, which is close to the trade unions.
The statutory minimum wage was introduced on January 1, 2015. According to the study, there have been significant increases in salaries in the lower income bracket as a result. For employees in eastern Germany, these rose by an average of 21 percent in real terms in the period from 2013 to 2018, and by as much as 31 percent for a monthly salary of just under 1,300 euros. In the west, the effects were also positive, but less pronounced, because fewer people work in the low-wage sector. The increase in the lower income bracket was around 12 percent.
“This is probably mainly a minimum wage effect,” said study author and labor market expert Toralf Pusch. The minimum wage has made a significant contribution to reducing wage inequalities in various regions. “The clear increase in monthly income also allays the concerns of some experts critical of the minimum wage that employers could, in return, reduce the number of hours of employees in the minimum wage range after the introduction of the wage floor.”
The incomes of people with relatively high incomes rose less sharply between 2013 and 2018. They increased by around 14 percent in the east and by 11 percent in the west.
The effects of the most recent minimum wage increase and the increase to 12 euros in 2022 are not taken into account in the study. The basis was data from 2008, 2013 and 2018. Figures for 2023 are not yet available. The income and consumption sample is only collected every five years.