Study on the minimum wage: Millions earn less than 12 euros

Status: October 28, 2021 2:20 p.m.

According to a study, 8.6 million employees earn less than the twelve euros per hour that the SPD, Greens and FDP are planning as future minimum wages. Women in particular would benefit from the increase.

A study by the trade union-related Economic and Social Science Institute (WSI) of the Hans Böckler Foundation comes to the conclusion that raising the minimum wage to EUR 12 would lead to significant wage increases, especially for employees who are not bound by collective bargaining agreements. These are around three times as likely to be affected by wages below EUR 12.00 gross per hour as employees who are paid according to the tariff.

According to this, around 8.6 million employees would benefit from an increase, around two thirds of them are women. According to the twelve-page exploratory paper, the potential partners of the Ampel coalition have already made the decision that the minimum wage should rise to EUR 12 per hour in the event of a joint government formation.

Health care severely affected

Up to now, wages below twelve euros were most common in retail, healthcare, building maintenance, catering and social services. According to occupations, specialists in catering and housekeeping, sales assistants, medical assistants, cooks and professional drivers were severely affected. There are also assistants in cleaning, housekeeping, kitchens and logistics.

According to the WSI analysis, the vast majority of employment relationships in which the higher minimum wage would lead directly to a wage increase is the main job of the employee concerned. That applies to 7.3 million people in the current year. Another 1.3 million jobs in this wage segment are secondary jobs. Of the main jobs, in turn, around three million full-time and almost 4.3 million part-time positions.

Positive effect on government revenues?

An increase in the minimum wage to twelve euros would result in an average wage increase of 1.0 percent for the entire group of employees paid under the collective agreement. Among the employees without a tariff, however, the plus was significantly greater at 4.1 percent. This shows that the higher minimum wage “does not represent a deep interference with collective bargaining autonomy,” said WSI labor market expert Toralf Pusch. It would be “above all an effective support for stabilizing the wages of employees without a collective agreement”.

A study sponsored by the union-affiliated Institute for Macroeconomics and Business Cycle Research (IMK) recently showed that an increase in the minimum wage to twelve euros would make economic sense. In the long term, economic output would increase by around 50 billion euros a year. The state revenue increased accordingly by around 20 billion euros annually.

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