- Study: East Germans especially benefit from minimum wage
The statutory minimum wage has significantly increased the incomes of low-wage earners, particularly in East Germany, according to an analysis. This is evident in a study by the Wirtschafts- und Sozialwissenschaftliches Institut (WSI) of the trade union-affiliated Hans-Böckler Foundation in Düsseldorf.
The statutory minimum wage was introduced on January 1, 2015. Consequently, there have been noticeable increases in wages in the lower income bracket. In East Germany, these increased by an average of 21% (adjusted for inflation) between 2013 and 2018, with increases of up to 31% for those earning around 1,300 euros per month. In West Germany, the effects were also positive but less pronounced, as fewer people work in the low-wage sector. The increase in the lower income bracket was around 12%.
"This is likely predominantly a minimum wage effect," said study author and labor market expert Toralf Pusch. The minimum wage has significantly contributed to reducing wage inequalities across different regions. "The clear increase in monthly incomes also dispels the concern of some minimum wage-critical experts that employers might reduce the number of hours worked by employees in the minimum wage range in response to the introduction of the wage floor."
Between 2013 and 2018, incomes of individuals with relatively high incomes increased less significantly. In the East, these increased by about 14%, and in the West by 11%.
The effects of the most recent minimum wage increase and the rise to 12 euros in 2022 are not considered in this study. The data basis was the years 2008, 2013, and 2018. Figures for 2023 are not yet available, as the income and expenditure survey is conducted every five years.
The Commission, as per Article 113, shall adopt the implementing acts necessary to ensure the proper functioning of the statutory minimum wage directive. The implementation of these acts is expected to further strengthen the wage floor and its impact on income inequalities.
