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This is one of the reforms most debated in recent years, it will remain as one of the great texts of the current legislature: from 1 st in January 2015, Germany has a minimum wage. It is set at 8.50 euros per hour for all workers, with some exceptions, including apprentices, trainees and long-term unemployed. If Germany has long been reluctant to adopt such a tool, the reform was passed in Parliament by a large majority, and some surveys attest that it is supported by nearly 90% of the population.
What will Germany with the minimum wage? Experts agree that it should profoundly change the labor market. First, because the specified rate will also apply well to the east and west of the country. Twenty-five years after the Berlin Wall fell, the persistent wage frontier should finally be erased. This is certainly what hope the Social Democratic Party, the bearer of the reform. Germans living in the East should be the primary beneficiaries of the minimum wage: currently one in four earns less than 8.50 euros per hour
The minimum wage should also transform the low-wage sector, which now account for almost one in four jobs in Germany. According to a study of the labor research institute and employment IAB published in 2013, Germany is one of the European countries with highest low wages. A quarter of employees in Germany in 2010 earned less than 9.54 euros gross per hour, the median salary, more than 7 million people. According to the reformers that will come into force on 1 st January, the minimum wage should affect 4 million employees only. It is basically for people with reduced activity, women and unskilled workers.
hair can be cut to less than 15 euros
Among the affected trades, being a hairdresser is the most emblematic. Hair can be cut in Germany for less than 15 euros. Some chains have made it their specialty. On the windows of the discounters, a single price of 10 € 12 for a haircut attracts the barge, even in the most fashionable streets of Berlin. How is this possible? Thanks to a branch agreement which provided up there is little a base salary of the craftsman hairdresser less than 5 euros an hour, plus a profit to revenues. Anticipating the reform, the profession has finally adopted in November 2014 a new branch agreement introduces a gradual increase in the minimum wage, currently set at 7.50 euros and will reach 8.50 euros per hour at 1 st August 2015 in Berlin and the eastern regions. This increase is expected to raise prices.
Some salons already deplored a decline in sales. The experts monitor the area, hoping to detect long-term effects of the minimum wage: the evolution of turnover, employment and the black market will give clues for all the consumer services sector, very concerned low wages. This is the case of taxi drivers, whose average salary, including waiting time does not exceed 7 euros per hour, which will have to increase their prices. Employees in the catering sector or florists are also concerned. In agriculture, despite the exceptions allowed by law for seasonal workers, many operators believe that the minimum wage will have negative consequences on their income and competitiveness.
A rate unemployment at 4.9%
The question of the effects of minimum wages on employment in Germany is jubilant with an unemployment rate at 4.9%, divides. Some experts, such as the president of the German central bank, Jens Weidmann, fear a “containment of the dynamics of employment” , growing difficulties in hiring for businesses and an obstacle to the access to employment for low-skilled. The IFO Institute for Economic Research estimates that 900,000 jobs could be lost, including 340 000 full-time. The impact on employment in the East, where the economic fabric is low, many economists worry. The director of the Employment Agency, Frank-Jürgen Weise, rejects it, the scenario of dramatic consequences for the labor market.
The actual consequences of the introduction of the minimum wage will not known in a few years. People, especially the reform will mitigate wage inequalities become intolerable in the eyes of many. Karl Brenke economist Berlin DIW economic institute, however, insists that the only reform “can not be an effective tool in the fight against poverty and income inequality” growing in Germany. “The minimum wage often passed on to consumer prices, especially affect the purchasing power” , he considers. Germany now has 4.4 million recipients of the minimum allocation called Harz IV, only half a million less than at its introduction five years ago.
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