Dü sch, Ma hias; Ohle , Clemens; Baumann, A ne
A icle
The minimum wage in Ge many: Ins i u ional se ing and
a sys ema ic e iew o key indings
Jou nal o Economics and S a is ics
P o ided in Coope a ion wi h:
De G uy e B ill
Sugges ed Ci a ion: Dü sch, Ma hias; Ohle , Clemens; Baumann, A ne (2025) : The minimum wage
in Ge many: Ins i u ional se ing and a sys ema ic e iew o key indings, Jou nal o Economics and
S a is ics, ISSN 2366-049X, De G uy e Oldenbou g, Be lin, Vol. 245, Iss. 1/2, pp. 113-151,
h ps://doi.o g/10.1515/jbns -2023-0038
This Ve sion is a ailable a :
h ps://hdl.handle.ne /10419/333307
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Ma hias Dü sch*, Clemens Ohle and A ne Baumann
The Minimum Wage in Ge many:
Ins i u ional Se ing and a Sys ema ic
Re iew o Key Findings
h ps://doi.o g/10.1515/jbns -2023-0038
Recei ed May 31, 2023; accep ed Ap il 13, 2024
Abs ac : The in oduc ion o a s a u o y minimum wage in Ge many in 2015
aimed a imp o ing he wel a e o low-wage wo ke s bu was also accompanied by
conce ns abou dis o ions in Eu ope’s la ges economy. This pape p o ides a
comp ehensi e su ey o esul s om he e alua ion o he Ge man minimum
wage by compiling ecen desc ip i e e idence and a sys ema ic li e a u e e iew
on causal effec s h ough 2022. On 1 Oc obe 2022, he minimum wage was aised
legisla i ely by 15 pe cen o 12 eu os pe hou , which affec ed app oxima ely 5.8
million employees and 23 pe cen o companies. The wa in Uk aine and he co o-
na i us pandemic hi minimum wage wo ke s and minimum wage fi ms ha de
han he es o he economy. The minimum wage hus a had he s onges causal
effec s di ec ly a e i s in oduc ion. Hou ly wages inc eased, while wo king hou s
dec eased, esul ing in mixed effec s on mon hly wages. O e all employmen ell
sligh ly, wi h a decline in ma ginal employmen in pa icula . Companies’wage cos s
inc eased, and as p oduc i i y did no change, p ofi s declined.
Keywo ds: minimum wage; sys ema ic e iew; e alua ion; Ge many
JEL Classifica ion: J08; J30; J31; J50
A icle No e: This a icle is pa o he special issue “Minimum Wages –Expe iences o Eu opean
Coun ies”published in he Jou nal o Economics and S a is ics. Access o u he a icles o his special
issue can be ob ained a www.deg uy e .com/jbns .
*Co esponding au ho : Ma hias Dü sch, Fede al Ins i u e o Occupa ional Sa e y and Heal h (BAuA),
Nöldne s . 40–42, 10317 Be lin, Ge many; and Chai o Sociology, Especially Wo k and Employmen a he
Uni e si y o Bambe g, Nöldne s . 40–42, 96052 Bambe g, Ge many,
E-mail: due sch.ma [email protected]
Clemens Ohle and A ne Baumann, Fede al Ins i u e o Occupa ional Sa e y and Heal h (BAuA),
Nöldne s . 40–42, 10317 Be lin, Ge many
Jou nal o Economics and S a is ics 2025; 245(1–2): 113–151
Open Access. © 2024 he au ho (s), published by De G uy e . This wo k is licensed unde he
C ea i e Commons A ibu ion 4.0 In e na ional License.
1 In oduc ion
Fo many yea s, Ge many was one o he ew OECD coun ies lacking a s a u o y
minimum wage. In esponse o a s eady decline in collec i e ba gaining co e age and
a g owing low-wage sec o , a s a u o y minimum wage was in oduced in 2015. A he
ime, he in oduc ion o he minimum wage was subjec o in ense con o e sy.
The e we e conce ns ha nega i e effec s on employmen could occu in Eu ope’s
la ges economy (A ni e al. 2014; Knabe, Schöb, and Thum 2014). In ac , he in o-
duc ion o he Ge man minimum wage was a majo in e en ion in he Ge man
labou ma ke , which benefi ed app oxima ely ou million o 11 pe cen o all
employees. I he e o e ep esen ed he mos impo an labou ma ke e o m since
he Agenda 2010 p og amme o he Sch öde go e nmen in he ea ly 2000s. Sub-
sequen ly, he minimum wage was aised ou imes by an independen Minimum
Wage Commission, mos ecen ly o 12.41 eu os pe hou in Janua y 2024. In Oc obe
2022, he minimum wage was inc eased om 10.45 eu os o 12 eu os h ough a
one- ime go e nmen in e en ion wi h he aim o eaching a highe le el o
wo ke s’p o ec ion agains low wages.
F om a concep ual poin o iew, a minimum wage is a policy measu e ha aims
o inc ease he pay o low-wage ea ne s and educe in-wo k po e y. Acco ding o
in e na ional s udies, minimum wages ha e led o an inc ease in low incomes and
educed inequali y (Au o , Manning, and Smi h 2016; Lee 1999; Teulings 2003;
DiNa do, Fo in, and Lemieux 1996). In Ge many, he e was also an expec a ion ha
he minimum wage would educe he dependence o low-wage ea ne s on supple-
men a y benefi paymen s o op up hei income o he subsis ence le el. Rega ding
employmen , s anda d neoclassical heo y p edic s employmen losses in a pe ec ly
compe i i e labou ma ke i he minimum wage is se abo e he ma ke -clea ing
wage. Assuming ha p e ailing wage le els a e ma ke clea ing a es, a minimum
wage will cause unemploymen . In con as , monopsony heo y claims ha labou
ma ke s a e impe ec . T ansac ion cos s such as sea ch, in o ma ion o mobili y
cos s may allow employe s o exploi hei ba gaining powe and se wages below
ma ke -clea ing a es. In such a case, labou ma ke ou comes migh be inefficien ,
esul ing in lowe wages and lowe employmen le els han hei coun e ac ual
le els in a compe i i e amewo k. A minimum wage would hus inc ease wages
and employmen le els and p omo e he efficiency o he labou ma ke (Bo jas
2015; Manning 2003). F om a diffe en an age poin , wage cos inc eases unde a
minimum wage can affec he compe i i e condi ions aced by companies. Labou
p oduc i i y could inc ease due o a subs i u ion o labou wi h capi al (Aa onson
and Phelan 2019). F om a mo e beha iou ally ocused poin o iew, such as he
wage–effo heo y (Ake lo and Yellen 1990), minimum wages can influence
wo ke s’effo s and lead o an inc ease in hei p oduc i i y. The a e age p o-
duc i i y o an en i e indus y can imp o e i less p oduc i e companies exi he
ma ke as a esul o he minimum wage. Howe e , fi ms’p ofi s could dec ease
114 M. Dü sch e al.
due ohighe wagecos si hesecanno becompensa ed,e.g.byhighe p ices
(D aca, Machin, and Van Reenen 2011; Ha asz osi and Lindne 2019).
Due o poli ical con o e sy, mixed in e na ional empi ical e idence on min-
imum wage effec s (Ca d and K uege 1994, 1995; Neuma k and Wasche 1992, 2008)
and con adic o y heo y-based p edic ions, ou pape aims o p o ide a comp e-
hensi e compila ion o esul s om he e alua ion o he Ge man minimum wage.
Fi s , as coun ies wi h a s a u o y minimum wage diffe in e ms o ins i u ional
design, such as he se ing o he minimum wage a he hou ly o mon hly le el and
adjus men mechanisms and exemp ions (A paia e al. 2017; Eu o ound 2022; OECD
and AIAS 2021), we will p o ide insigh in o he ins i u ional se ing o he mini-
mum wage in Ge many. Second, since he in oduc ion o he minimum wage, he
economic en i onmen will be examined, and adjus men s o he minimum wage
will be desc ibed. Thi d, and a he co e o he pape , is a compila ion o he esul s
o 38 ex ensi e s udies commissioned by he Minimum Wage Commission hus a ,
as well as nume ous academic pape s om uni e si ies and esea ch ins i u es.
This s udy hus goes beyond he ou li e a u e e iews by Bö schlein and Bossle
(2019), B u el (2019), B u el, Baumann, and Dü sch (2018) and Caliendo, Sch öde ,
and Wi b od (2019) and p o ides a mo e comp ehensi e assessmen o he impac
o he minimum wage in Ge many. Fo each o he cen al e alua ion c i e ia
specified in he Minimum Wage Ac , “app op ia ely p o ec ing wo ke s”,“a oiding
employmen losses”and “enabling ai and unc ioning condi ions o compe i ion”,
we p esen desc ip i e findings on he mos ecen impac o he minimum wage in
he yea s 2021 and 2022, o which no causal s udies a e ye a ailable. In hese
desc ip i e analyses, we ake a close look a he consequences o he co ona i us
pandemic, Russia’s wa agains Uk aine and he significan inc ease in he mini-
mum wage o 12 eu os. This is pa icula ly ele an because sepa a ing minimum
wage effec s om he effec s o o he e en s, such as he pandemic o he wa in
Uk aine, will emain an impo an me hodological ask in u u e minimum wage
esea ch. We hen ca y ou a sys ema ic li e a u e e iew o he causal effec s o
he minimum wage in he yea s 2015–2020. Fo each c i e ion, we y o answe ou
esea ch ques ion: Wha effec s did he minimum wage ha e? In ligh o he
comp ehensi e esea ch li e a u e, we no e whe e he e idence con e ges o solid
insigh s and whe e he esul s consis en ly diffe o a e ambiguous. Fou h, we
summa ize he main findings and offe an ou look on opics o u u e esea ch on
he minimum wage in Ge many.
2 Ins i u ional Se ing
A e many yea s o con o e sial discussions in Ge many (Bosch 2015), a s a u o y
minimum wage was passed by he Ge man pa liamen in July 2014 and came in o
The Minimum Wage in Ge many 115
o ce on 1 Janua y 2015 a a g oss a e o 8.50 eu os pe hou . I applies o all wo ke s,
excep employees younge han 18 yea s, app en ices, ainees and/o in e ns,
long- e m unemployed wo ke s in he fi s 6 mon hs a e aking up a new job, and
nonp ofi and/o olun a y wo ke s. In addi ion, o a ansi ional pe iod un il he
end o 2017, wages below he s a u o y minimum wage we e pe mi ed in sec o s
wi h collec i ely ag eed minimum wages ha we e decla ed gene ally binding by
go e nmen dec ees. This app oach was applied in he mea p ocessing, hai -
d essing, ag icul u al, empo a y wo k, ex ile and clo hing, and indus ial laund y
indus ies. The minimum wage o newspape deli e y wo ke s was also se below
he s a u o y le el un il he end o 2017. Since Janua y 2018, such sec o al excep-
ions no longe exis .
As measu ed by he Kai z index o ull- ime employees, which is he a io o he
minimum o he median wage, he Ge man s a u o y minimum wage in 2015
amoun ed o 48 pe cen , app oxima ely equal o he minimum wages in he UK (49
pe cen ) and he Ne he lands (46 pe cen ). F ance was a he op wi h an index o 62
pe cen , while Spain was a he bo om wi h 37 pe cen (OECD 2016). The p opo ion
o wo ke s affec ed by he new minimum wage was also high, co esponding o
app oxima ely 4 million jobs p e iously paying less han 8.50 eu os (g oss) pe hou ,
o 11.3 pe cen o all jobs (Minimum Wage Commission 2016). In he Uni ed Kingdom,
he co e age a e when he minimum wage was in oduced was 5.3 pe cen (Low Pay
Commission 2001).
The makeup o he Ge man Minimum Wage Commission was inspi ed by he
model o he B i ish Low Pay Commission, albei wi h impo an diffe ences. When
he Ge man Minimum Wage Commission was es ablished, emphasis was placed on
eflec ing he social pa ne ship in collec i e ba gaining and on nonin e e ence by
he s a e in wage nego ia ions, bo h o which a e cons i u ionally ensh ined in
Ge many. To his end, he independen Minimum Wage Commission was es ab-
lished wi h he esponsibili y o deciding on he adjus men o he minimum wage
e e y 2 yea s. Six o i s membe s ( h ee each) a e nomina ed by he BDA
(Con ede a ion o Ge man Employe s’Associa ions) and he DGB (Con ede a ion o
Ge man T ade Unions). The independen chai pe son is appoin ed on a join p o-
posal by he social pa ne s. In addi ion, he e a e wo scien ific membe s who ha e
an ad iso y ole and no o ing igh s. Fo he adjus men o he minimum wage, he
Minimum Wage Ac equi es he commission o make an o e all assessmen o he
minimum wage le el ha is app op ia e “ o con ibu e o he adequa e p o ec ion
o wo ke s, o enable ai and unc ioning compe i i e condi ions and o a oid
jeopa dizing employmen ”(§ 9 MiLoG). The Minimum Wage Ac also s ipula es ha
he commission has o ollow he pas de elopmen o collec i ely nego ia ed wage
a es in i s decision.
116 M. Dü sch e al.
3 Economic Con ex and Minimum Wage
Adjus men s
The economic si ua ion in Ge many a e he in oduc ion o he s a u o y mini-
mum wage in 2015 was cha ac e ized by obus economic g ow h, a high le el o
employmen , ela i ely low unemploymen and low infla ion. The in oduc ion and
fi s inc ease o he minimum wage hus occu ed in a a ou able economic con ex
(Figu e 1). F om he second hal o 2018 un il he end o 2019, he economy slowed.
F om 2020 o 2022, he co ona i us pandemic and associa ed es ic ions on social
and economic li e affec ed economic g ow h and employmen le els. F om he
beginning o he pandemic, economic de elopmen was s ongly influenced by he
changing incidence o in ec ion and he con ainmen measu es aken by he go -
e nmen . The sha p economic down u n in he fi s co ona i us wa e in sp ing
2020, wi h a 10.5 pe cen qua e -on-qua e decline in g oss domes ic p oduc
(GDP) in he second qua e o 2020, was ollowed by sligh economic eco e y in
he second hal o he yea as he pandemic si ua ion eased. The sha p inc ease in
in ec ion a es in he second co ona i us wa e a he beginning o 2021 esul ed in a
enewed GDP decline o 2.3 pe cen in he fi s qua e o 2021, which was in u n
ollowed by a eco e y in sp ing and summe . The yea 2022 showed a simila ly
undula ing cou se bu wi h less p onounced fluc ua ions in economic pe o mance
8,50 8,84 9,19 9,35 9,50 9,60 9,82 10,4512,00
8,60 8,50 8,40 8,50 8,60 8,50 8,40 8,40
8,80 8,70 8,60 8,60 8,60 8,50 8,40 8,40
8,80 8,70 8,60 8,70
8,90 8,80 8,80 8,90 8,80 8,70 8,70 8,60 8,60
8,30
8,70
9,80
11,5 1,5 1,9 2,2
3,6
1,9 1,4
3,6
1,3
2,7
3,1
1,3
2,1
0,2 0,3
1,4
0,1
1,9
0,7
-0,8
-10,5
-2,4
-1,2
-2,3
10,6
1,8
1,2
3,9
1,7 1,3
0,3
-12
-8
-4
0
4
8
12
6
7
8
9
10
11
12
GDP changes compa ed wi h he p e ious qua e in pe cen
Eu os
Nominal minimum wage Real minimum wage Qua e -on-qua e GDP changes in pe cen (p ice-adjus ed)
Figu e 1: Ge man minimum wage inc eases and economic condi ions. No e: The alues o he eal
minimum wage a e ounded o 10-cen amoun s. Sou ce: Fede al S a is ical Office; own calcula ions.
The Minimum Wage in Ge many 117
o e all. The nega i e economic consequences o he Russian wa agains Uk aine
eplaced he pandemic as he g ea es challenge o he Ge man economy du ing
2022. This has led o u he inc eases in infla ion and he ecep ion o many
e ugees om Uk aine, who en e ed he Ge man social benefi sys em and he
labou ma ke .
The Minimum Wage Commission made i s fi s decision in June 2016 and
inc eased he s a u o y minimum wage o 8.84 eu os (g oss) pe hou beginning in
Janua y 2017 (Figu e 1). The second decision o he commission in June 2018 led o a
wo-pa minimum wage inc ease in Janua y 2019 o 9.19 eu os and in Janua y 2020
o 9.35 eu os. In iew o he unce ain y abou he du a ion and economic conse-
quences o he co ona i us pandemic, he commission decided in June 2020 o se a
ou -s ep adjus men o 9.50 eu os in Janua y 2021, 9.60 eu os in July 2021, 9.82 eu os
in Janua y 2022 and 10.45 eu os in July 2022. Wi h he Ac o Inc ease he P o ec ion by
he S a u o y Minimum Wage and on Changes in Ma ginal Employmen (MiLoEG),
which came in o effec on 1 July 2022, he Ge man pa liamen inc eased he s a u o y
minimum wage om 10.45 o 12 eu os g oss pe hou as o 1 Oc obe 2022 by
amending he Minimum Wage Ac (MiLoG). The amendmen suspended he egula
adjus men p ocedu e, acco ding o which he Minimum Wage Commission would
ha e made a decision on he minimum wage adop ion in June 2022, which would
ha e come in o effec on 1 Janua y 2023. Due o he change in he law, he da e o he
nex adjus men decision o he Minimum Wage Commission was pos poned by 1
yea o 30 June 2023, when he Minimum Wage Commission decided by majo i y o
inc ease he minimum wage o 12.41 eu os pe hou in 2024 and o 12.82 eu os pe
hou in 2025.
Acco ding o calcula ions by he O ganisa ion o Economic Co-ope a ion and
De elopmen (OECD), he Kai z index o ull- ime employees anged om 42 pe cen
in La ia o 66 pe cen in Po ugal in 2021. Ge many was in he mid ange o hese
coun ies in 2021, wi h a alue o 51 pe cen . Wi h he minimum wage inc ease o 12
eu os pe hou in Oc obe 2022 by he Ge man Bundes ag, he Kai z index inc eased
significan ly. Acco ding o da a om he Oc obe 2022 Ea nings su ey (ES), he Kai z
index based on he median hou ly wage o ull- ime employees was app oxima ely 56
pe cen in Oc obe 2022. The Kai z index o all employees, including hose in pa -
ime and ma ginal employmen , was 63 pe cen in Oc obe 2022. Thus, he inc ease in
he minimum wage o 12 eu os led o Ge many mo ing om a middling posi ion
in in e na ional compa isons in o he op ange o he ankings. Agains his back-
g ound, we desc ibe in he ollowing sec ion wha effec s he minimum wage has had
since i s in oduc ion in Ge many and p o ide ea ly insigh s in o he inc ease o 12
eu os.
118 M. Dü sch e al.
4 Findings on he Ge man Minimum Wage
4.1 Co e age o he Minimum Wage
As al eady men ioned, he e we e app oxima ely 4.0 million employees
1
wi h hou ly
wages less han 8.50 eu os in Ge many p io o he in oduc ion o he s a u o y
minimum wage, acco ding o da a om he S uc u e o Ea nings Su ey (SES) om
Ap il 2014.
2
This figu e co esponds o 11.3 pe cen o all employees who we e
affec ed by he newly in oduced minimum wage (Mindes lohnkommission 2016: 39).
The incidence o affec ed wo ke s declined he ea e . In 2018, be o e he second
inc ease in he minimum wage, he e we e app oxima ely 2.5 million employmen
ela ionships in Ge many wi h hou ly wages below he s a u o y minimum wage o
9.19 eu os (Mindes lohnkommission 2020: 56). This was equi alen o a sha e o
app oxima ely 6.6 pe cen o o al employmen . A he beginning o 2020, app oxi-
ma ely 2.2 million employees we e affec ed by he minimum wage inc ease o 9.35
since hey had p e iously ea ned hou ly wages below ha alue. This co esponded
o a sha e o app oxima ely 5.6 pe cen (Mindes lohnkommission 2023: 71). Co e age
o he minimum wage inc eased again wi h he adjus men o he minimum wage by
he Minimum Wage Commission o 10.45 eu os in July 2022 (3.1 million jobs o 8
pe cen ). Wi h he legisla i e minimum wage inc ease o 12 eu os in Oc obe 2022, he
numbe and sha e o affec ed jobs inc eased u he o 5.8 million o 14.9 pe cen o
o al employmen (Mindes lohnkommission 2023: 71).
The p opo ion o jobs co e ed by he minimum wage a ies ac oss egions and
g oups o employees. Da a om he mos ecen Ea nings Su ey (ES) om Ap il 2022
indica e a g ea e p opo ion o employees wi h an hou ly wage a o below he
binding minimum wage o 9.82 eu os in eas e n Ge many (4.4 pe cen ) han in
1The SES/ES con ains main jobs and side jobs. The e o e, s ic ly speaking, i ep esen s employmen
ela ionships and no employees.
2The 2014 and 2018 S uc u e o Ea nings Su eys we e manda o y and ep esen a i e c oss-
sec ional es ablishmen su eys. They each co e ed app oxima ely 60 housand es ablishmen s wi h
a leas one employee subjec o social insu ance con ibu ions and p o ided de ailed in o ma ion on
ea nings and wo king hou s o app oxima ely 1 million employmen ela ionships (S a is isches
Bundesam 2016). The ea nings su eys (ES) o he yea s 2015, 2016, 2017 and 2019 we e olun a y
es ablishmen s su eys conduc ed wi hou an obliga ion o p o ide in o ma ion on ea nings and
wo king hou s. The ESs we e based on da a om app oxima ely 6 o 8 housand es ablishmen s each.
The New Ea nings Su ey, beginning in 2021, eplaced he wo p e iously men ioned (S uc u e o )
Ea nings Su eys o he Fede al S a is ical Office. Pa icipa ion in he new ES is manda o y. Since
Janua y 2022, he su ey has been conduc ed mon hly ia an online epo ing p ocedu e. I comp ises
a nominal sample o 58 housand es ablishmen s wi h a leas one employee subjec o social secu i y
con ibu ions (S a is isches Bundesam 2022).
The Minimum Wage in Ge many 119
wes e n Ge many (3.8 pe cen ) (Mindes lohnkommission 2023: 57). The p opo ion
o affec ed women was also g ea e han ha o men (4.3 pe cen ; 3.4 pe cen ). The
same applies o employees wi h non-Ge man na ionali y (5.6 pe cen ) compa ed o
Ge man employees (4.1 pe cen ). Co e age o he minimum wage was also mo e
equen han on a e age in companies wi h ewe han 5 employees (9.1 pe cen ),
among unskilled o semiskilled wo ke s (9.4 pe cen ), among fixed- e m wo ke s (6
pe cen ) and among wo ke s no co e ed by collec i e ag eemen s (6.1 pe cen ).
Ma ginal pa - ime wo ke s we e pa icula ly equen ly affec ed by he minimum
wage (14.7 pe cen ). The diffe ences be ween he employee g oups we e e y
simila a he in oduc ion o he minimum wage and a i s la e adjus men s
(Mindes lohnkommission 2018: 64; 2016: 41).
4.2 Wages
Rega ding he e alua ion c i e ion o wo ke p o ec ion, he ocus is on he effec s
o he minimum wage on he wages and incomes o employees. Assessmen s o he
effec s o he minimum wage on hou ly wages ha e hus a been ca ied ou
mainly wi h mic o da a om he Ge man Socio-Economic Panel (GSOEP).
3
This
su ey con ains in o ma ion on mon hly ea nings and on con ac ually ag eed and
ac ual weekly wo king hou s, which allows he calcula ion o hou ly wages (Dü sch,
Himmel eiche , and Ohle 2019). The SES, an es ablishmen su ey, p o ides
c oss-sec ional da a and has been used o quasipanel analyses a he egional and
es ablishmen le els (Biewen, Fi zenbe ge , and Rümmele 2022; Ohle 2022) and
o desc ip i e analyses.
4
The adminis a i e da a o he In eg a ed Employmen
Biog aphies (IEB) ha e been used less equen ly, as hey do no con ain in o ma ion
on wo king hou s on a egula basis. S udies using he IEB he e o e supplemen ed
o impu ed wo king hou s om o he da ase s. The IAB Es ablishmen Panel (IAB
EP), which is a ep esen a i e panel o es ablishmen s in Ge many, is also egula ly
used o s udy he effec s o he minimum wage on company-le el a iables such as
wage cos s.
Fo he mos ecen pe iod be ween 2020 and 2023, only desc ip i e esul s a e
a ailable. In his pe iod, he Ge man labou ma ke was influenced by he co ona-
i us pandemic, Russia’s wa agains Uk aine and he inc ease in he minimum wage
by 15 pe cen o 12 eu os pe hou . To p o ide ull insigh in o he effec s ha he
3The GSOEP is a su ey conduc ed annually since 1984 among app oxima ely 16 housand house-
holds wi h app oxima ely 28 housand pe sons, including app oxima ely 13 housand employees,
wi h de ailed in o ma ion on main jobs (Goebel e al. 2019).
4Since 2022, he Ea nings Su ey has ga he ed mon hly panel da a, which a e, howe e , no ye
a ailable.
120 M. Dü sch e al.
In e ms o li ing condi ions and social secu i y, mon hly wages a e mo e
ele an o employees han hou ly wages a e. When he minimum wage inc eases,
mon hly wages may inc ease, emain cons an , o dec ease depending on changes
in hou s wo ked. Empi ical findings on mon hly wages based on he GSOEP, he
IEB, heSES/ESand heIABEs ablishmen Panela ep esen edin he igh ou
columns o Table 1. Causal s udies based on he GSOEP p o ide mixed esul s: While
Bu auel e al. (2018) could de e mine an effec o 6.6pe cen onmon hlywagesin
he sho un up o 2016, Bachmann e al. (2020, 2022); Caliendo e al. (2023b) did no
find any s a is ically significan effec s o he in oduc ion o he minimum wage in
2015 o o he minimum wage inc eases up un il 2019. The la e esul also applied
o employee subg oups. Agains he backg ound o he posi i e minimum wage
effec s on ac ual hou ly wages, he ze o effec on mon hly wages indica es ha he
weekly wo king hou s o minimum wage employees may ha e been educed.
Howe e , on he basis o he IEB, dis inc ly posi i e minimum wage effec s on
mon hly wages we e de ec ed (Bossle and Schank 2023). Thus, a 10-pe cen age-
poin inc ease in he applicabili y o he minimum wage caused an inc ease in
mon hly wages o app oxima ely 4.4 pe cen in 2015 and 2016 and app oxima ely
5.4 pe cen in 2017. Based on he IAB EP, he a e age g oss wage sum pe employee
in companies affec ed by he in oduc ion o he minimum wage g ew by 3.8–6.3
pe cen mo ein2015 haninunaffec ed companies (Bossle and Ge ne 2020).
Using he same da a, Bossle e al. (2022: 41) ound significan minimum wage
effec s o be ween 4.3 and 6.6 pe cen in all yea s 2015–2020. In he sho e m un il
2015, Ohle (2022) e ealed an inc ease in mon hly wages o app oxima ely 3.0
pe cen on a e age and o 7.9 pe cen o low-wage wo ke s in minimum wage
es ablishmen s using he SES/ES. The effec s on mon hly wages a e he e o e
s onge in s udies ha a e based on fi m da a and ha measu e wage g ow h as a
dependen a iable. Rega ding he adjus men s o he minimum wage, Bachmann
e al. (2022) de e mined a significan decline in mon hly ea nings o 8.3 pe cen in
2018 based on he GSOEP. Bossle e al. (2022), in con as , ound a g ow h o 1.8
pe cen based on he IAB EP. Howe e , hey e ealed la e declines o 2 and 3.8
pe cen as a esul o he second and hi d inc eases in he minimum wage,
espec i ely. Bo h Bachmann e al. (2022) and Bossle e al. (2022) explained he
espec i e declines in mon hly wages wi h a lowe inc ease in he minimum wage
compa ed o a e age wages du ing his pe iod.
The e is e idence on he ela ionship be ween he minimum wage and collec i e
ba gaining nego ia ions in low-wage indus ies om a quali a i e s udy (Bispinck
e al. 2023). By examining he pe iod om 2020 o 2022, he s udy ound ha he
minimum wage inc ease o 12 eu os pe hou posed a pa icula challenge o col-
lec i e ba gaining. Thus, collec i ely ag eed wages we e h ea ened o be o e aken
in many low-wage sec o s. Acco ding o an analysis o 564 collec i e ag eemen s
The Minimum Wage in Ge many 127
a ailable o he Fede al S a is ical Office as o 21 No embe 2022, he e we e s ill a
o al o 180 sec o al and company collec i e ag eemen s con aining a leas one pay
g oup wi h g oss hou ly wages o less han 12 eu os pe hou . To a oid being
o e aken by he minimum wage, he collec i e ba gaining pa ies in almos all o
he sec o s examined in he s udy adjus ed he collec i ely ag eed wages acco d-
ingly. In some cases, he schedule o collec i e ba gaining was e en b ough o -
wa d. The minimum wage-induced adjus men s o collec i e pay scales led o
abo e-a e age wage inc eases a he lowes pay scales. To a lesse ex en , highe
pay scales we e also aised. Thus, he adjus men o he minimum wage has led o a
significan inc ease in he le el o collec i ely ag eed wages in low-wage sec o s.
4.3 Wo king Time
Reducing wo king hou s can be a measu e aken by companies o lowe wage cos s
ha ha e inc eased as a esul o he minimum wage. Adjus men s in wo king hou s
can hus also be seen as a way o fi ms o adjus employmen . On he o he hand,
employees may also eac o a minimum wage-induced inc ease in hou ly wages by
educing o expanding hei wo king hou s (Bachmann e al. 2022: 115). Due o mixed
e alua ion esul s ega ding he scope and pe sis ence o hese effec s, he e has
been a li ely deba e abou he ele ance o minimum wage effec s on wo king hou s
in Ge many. Ou li e a u e su ey shows ha exis ing s udies la gely find educ ions
in wo king ime, pa icula ly di ec ly a e he in oduc ion and he fi s inc ease in
he minimum wage.
Fo hemos ecen yea s,onlydesc ip i ee idenceon hewo king imeo
minimumwagewo ke sisa ailable.Due oda acollec ionp oblemsdu ing he
pandemic (see Sec ion 3.1), he esul s o 2020 a e pa icula ly sca ce. The esul s
om he “co ona i us high- equency online pe sonal panel”(HOPP) su ey
showed ha he pe cen age educ ion in hou s wo ked pe week in May 2020,
compa ed o he ime be o e he pandemic, was significan ly g ea e o minimum
wage employees han o highe -paid employees (Jaenichen 2021). This esul
eflec s he ela i ely s ong impac o he pandemic on low-wage wo ke s.
Acco ding o he Ea nings Su ey om Ap il 2022, he numbe o paid wo king
hou s o minimum wage wo ke s was s ill lowe han ha in 2019, wi h 37.5 h o
ull- ime employees, 20.4 h o pa - ime employees and 7.7 h o hose in ma ginal
employmen (Mindes lohnkommission 2023: 136).
Causal s udies on minimum wage effec s o he yea s 2015–2019 consis en ly
iden ified a educ ion in con ac ual wo king hou s di ec ly a e he in oduc ion o
he minimum wage in 2015 (see Table 2 and Bachmann e al. 2020: 118 .; Bonin e al.
2018: 92ff.; Bossle and Ge ne 2020; Ohle 2022; Pusch, Sei e , and San o o 2020).
128 M. Dü sch e al.
No e ha he scope o absolu e changes in wo king hou s diffe s s ongly be ween
s udies and by esea ch design. Fo example, Bachmann e al. (2020) epo ed o he
yea 2015 ha con ac ual wo king ime was on a e age educed by 9 min pe week
Table :Causal effec o he minimum wage on wo king ime.
Minimum wage Yea Con ac ual hou s
(GSOEP)
Ac ual hou s
(GSOEP)
Paid wo king ime (SES/ES)
In oduc ion
()
−%aZe
Bonin e al. (:)
−%aZe
Bu auel e al. (:
)
n.s.aZe
Bonin e al. (:
)
−%aXg
Caliendo e al.
(b: .)
−%aYe
Ohle (:)
n.s.aZe
−%aXe
(Bachmann e al. :
ff.)
−%aXe
(Bachmann e al.
:)
n.s.aZe
−%aXe
(Bachmann e al. :
ff.)
−%aXe
(Bachmann e al.
:)
n.s.aZe
− %aXe
(Bachmann e al. :
,)
− %aXe
(Bachmann e al.
: .)
− %aXg
Caliendo e al.
(b: .)
n.s.aXg
(Biewen, Fi zenbe ge , and
Rümmele : .)
n.s.aZe
− %aXe
(Bachmann e al. :
,)
− %aXe
(Bachmann e al.
: .)
Fi s inc ease
−.%aZe
(Bachmann e al. :
)
–
−.%aZe
(Bachmann e al. :
)
–
Second inc ease
n.s.aZe
(Bachmann e al. :
)
–
No es: Bi e-measu e: con inuous e sus bina y; Da a: aemployee e sus bfi m da a; Le el o analysis: X egional e sus
Yfi m e sus Zemployees; Dependen a iable: echange in wo king ime e sus change in wo king ime g ow h e sus
gdis ibu ion o wo king hou s n.s., non-significan esul s; p. . ., iola ion o pa allel ends assump ion. Sou ce: Own
compila ion.
The Minimum Wage in Ge many 129
in egions wi h a highe minimum wage bi e (by one s anda d de ia ion). Fo he
same yea , Bossle and Ge ne (2020) no ed a dec ease in a e age con ac ed weekly
wo king hou s in minimum wage es ablishmen s o 0.22 h (13 min) compa ed o
es ablishmen s wi hou minimum wage employees. Bu auel e al. (2020) e ealed an
a e age educ ion in weekly wo king hou s o 1.7 h in 2015 o employees wi h hou ly
wages less han 8.50 eu os compa ed o employees wi h highe wages. Bachmann
e al. (2022) and Ohle (2022) showed ha he measu ed wo king ime effec s we e
g ea e o low-wage wo ke s han o a e age wo ke s in egions o fi ms.
Fo la e yea s, he findings diffe be ween s udies ha measu e he bi e o
he minimum wage a he indi idual le el and hose ha measu e he bi e a he
egional o he fi m le el. Focussing on employees who ea ned less han he
minimum wage be o e i s in oduc ion, Bachmann e al. (2020, 2022) did no find
effec s o he in oduc ion o he minimum wage on wo king ime in 2016 o in la e
yea s un il 2019. Fo employees affec ed by subsequen inc eases in he minimum
wage, Bachmann e al. (2022: 132ff.) did e eal significan educ ions in wo king
hou s in 2017 and 2018 o app oxima ely 14.4 pe cen and 17.8 pe cen , espec i ely,
bu no in 2019.
By compa ing egions wi h a highe minimum wage bi e and egions wi h a
lowe minimum wage bi e, Bachmann e al. (2020, 2022); Caliendo e al. (2023b)
de ec ed nega i e effec s on con ac ual wo king ime each yea since 2015 using he
GSOEP. Diffe en ia ion o wo king ime effec s wi h his app oach poin ed o
s onge educ ions in wo king ime o pa - ime employees and ma ginal em-
ployees among women (in 2018 and 2019) and in he lowe 40 pe cen o he dis i-
bu ion o mon hly ea nings (Bachmann e al. 2022: 137 .). Biewen, Fi zenbe ge , and
Rümmele (2022) also measu ed he minimum wage bi e a he egional le el using he
S uc u e o Ea nings Su ey in 2014 and 2018 and ound no minimum wage effec s
on paid wo king ime. Bossle and Ge ne (2020) examined a e age wo king ime in
es ablishmen s affec ed by he minimum wage compa ed o ha in o he es ab-
lishmen s. They e ealed a wo king ime effec o −0.4 pe cen in 2015 and no sig-
nifican effec in 2016. Ohle (2022) compa ed he change in paid wo king ime o
employees in minimum wage es ablishmen s o employees in o he es ablishmen s.
Thus, wo king ime significan ly dec eased by app oxima ely 3 pe cen on a e age
and by 6 pe cen o low-wage employees in 2015. The a e age wo king ime
educ ion was smalle among women han among men.
Rega ding ac ual wo king ime, no s a is ically significan minimum wage effec
was ound o 2015 using a ea men defini ion based on indi idual wages (Bonin
e al. 2018: 92ff.). The au ho s concluded ha he in oduc ion o he minimum wage
could ha e led o a subs i u ion o ag eed wo king ime wi h o e ime. Howe e ,
Bachmann e al. (2020); Caliendo e al. (2023b): 116ff.) and Bachmann e al. (2022: 131),
iden ified e en somewha s onge declines in ac ual wo king ime han in
130 M. Dü sch e al.
con ac ual wo king ime based on a egional app oach. This sugges s a dec ease
o e ime among minimum wage employees.
4.4 Noncompliance wi h he Minimum Wage
The minimum wage is effec i e only i he p o isions o he Minimum Wage Ac
a e complied wi h and i he minimum wage is ac ually paid. Howe e , defici s in
compliance wi h he s a u o y minimum wage ha e been obse ed. Viola ions o
he s a u o y minimum wage a e in mos cases associa ed wi h he ailu e o eco d
o wi h mis eco ding o ac ual wo king hou s. In o ma ion on hou ly wages below
he minimum wage ob ained om he SES/ES, which is a su ey o employe s,
diffe s significan ly om ha ob ained om he household su ey conduc ed by
he GSOEP. Howe e , impo an ly, nei he su ey is designed o de e mine he
deg ee o noncompliance wi h he Minimum Wage Ac in e ms o hei objec i es
no he specific in o ma ion eques ed. P e ious s udies on measu emen e o s
ha e concluded ha he e a e sys ema ic diffe ences be ween he wo su eys.
These can be a ibu ed o he espec i e su ey designs, o ypical measu emen
e o s, such as he ounding beha iou o esponden s, and o he so-called mean
e e sion (Bachmann e al. 2020: 76ff.; Dü sch, Himmel eiche , and Ohle 2019).
The e a e also findings on he p oblem o incen i es wi h espec o employe -
epo ed noncompliance. Since paying wages below he minimum wage is an
offence, employe s may no wan o epo such low wages and adjus hei da a
be o e epo ing (Ga ne o, Kampelmann, and Rycx 2015). This leads o diffe ences in
mon hly wages, weekly wo king hou s and g oss hou ly wages, especially a he
lowe end o he espec i e dis ibu ion be ween he SES/ES and he GSOEP.
Acco dingly, he ES epo ed app oxima ely 1.0 million employmen ela ion-
ships below he minimum wage in 2015 and app oxima ely 750 housand in 2016
(Figu e 3). In e ms o all employmen ela ionships, his esul ed in sha es o 2.8
pe cen and 2.1 pe cen . Acco ding o he GSOEP, a significan ly la ge g oup o
employees ea ned less han 8.50 eu os pe hou a e he in oduc ion o he mini-
mum wage. In 2015 and 2016, he GSOEP epo ed 2 million and 1.8 million employees,
espec i ely, who ea ned less han he minimum wage when con ac ual wo king
hou s we e examined (Bu auel e al. 2017). In 2015, his co esponded o a sha e o
8.2 pe cen , and in 2016, i co esponded o a sha e o 7.0 pe cen o he popula ion
o app oxima ely 26.2 million employees. In he ollowing yea s, he figu es o
noncompliance ell somewha , bu in he GSOEP, hey we e s ill conside ably g ea e
han hose in he SES/ES. In Ap il 2022, on he basis o he ES, he e we e app oxi-
ma ely 798 housand employmen ela ionships and hus a sha e o 2.1 pe cen wi h
The Minimum Wage in Ge many 131
hou ly wages below he s a u o y minimum wage o 9.82 eu os. Fo 2022, no figu es
a e ye a ailable om he GSOEP.
Fo 2022, he mon hly de elopmen o employmen wi h hou ly wages below
he s a u o y minimum wage is a ailable based on da a om he ES (Figu e 3). The
numbe o jobs below he minimum wage was ela i ely high in he mon hs
o Janua y, July and Oc obe , du ing which he minimum wage inc eased, and
dec eased quickly in he ollowing mon hs. The pa e n indica es ha he imple-
men a ion o he minimum wage in companies is s ill incomple e immedia ely a e
an adjus men and inc eases o e ime. The measu es in 2018 and 2019 we e aken
a a ime when he espec i e new minimum wage le els had al eady been in effec
o 16 and 4 mon hs, espec i ely, and he companies had acco dingly had ime o
implemen hem. Thus, pa o he noncompliance wi h he minimum wage is a
ansi ional phenomenon and can be aced o delays in i s implemen a ion.
4.5 Employmen and Unemploymen
The second e alua ion c i e ion men ioned in he Minimum Wage Ac is ha
jeopa dizing employmen should be a oided. Desc ip i e e idence on selec i e
1.000
750
830
480
530
980
870
940
800
720 690
1.310
1.100
980
1.610
1.250
1.130
04/2015 04/2016 04/2017 04/2018 04/2019 01/2022 02/2022 03/2022 04/2022 05/2022 06/2022 07/2022 08/2022 09/2022 10/2022 11/2022 12/2022
s
d
n
a
s
u
o
h
n
i
se
eyo
l
p
m
e o
eb
m
uN
Mon h/Yea
Minimum wage
€ 9.82
Minimum wage
€ 10.45
Minimum wage
€ 12.00
Minimum
wage
€ 9.19
Minimum
wage
€ 8.84
Minimum
wage
€ 8.50
Figu e 3: De elopmen o minimum wage noncompliance o e ime. Sou ce: S uc u e o Ea nings
Su ey (SES) 2018, Ea nings Su eys (ES) 2015, 2016, 2017, 2019, 2022.
132 M. Dü sch e al.
employmen indica o s will be p esen ed fi s . Causal analyses on he effec s o he
minimum wage on employmen will be subsequen ly discussed.
In 2015 and 2016, a e he in oduc ion o he minimum wage, employmen g ew
mo e s ongly in minimum wage sec o s han in he es o he economy. This was
also ue o wes e n and eas e n Ge many (Figu e 4). This de elopmen e e sed in
2017 and 2018, when employmen in he es o he economy inc eased mo e s ongly
han did employmen in minimum wage sec o s. As a esul o he measu es aken o
con ol he co ona i us pandemic, o al employmen dec eased significan ly
beginning in he second qua e o 2020 in bo h pa s o he coun y. The e was an
employmen decline, pa icula ly in he minimum wage sec o s. This is because he
minimum wage sec o s we e also hose mos affec ed by lockdown measu es, o
example, h ough he closu e o es au an s, ba s and e ail shops. Acco dingly, he
numbe o employees in sho - ime wo k, which was he mos impo an labou
ma ke policy measu e du ing he co ona i us pandemic, inc eased sha ply.
5
The
p opo ion o employees ecei ing sho - ime benefi s was g ea e in minimum
wage sec o s han in non–minimum wage sec o s. Employmen in he minimum
wage sec o s g ew again and de eloped mo e dynamically han did employmen in
he non–minimum wage sec o s om he ou h qua e o 2021 un il he second
qua e o 2022 (Figu e 4). The educ ion in employmen in he minimum wage
sec o s du ing he pandemic was d i en mainly by a decline in ma ginal employ-
men (i.e. employmen la gely exemp ed om social secu i y con ibu ions), as only
egula employees can ecei e sho - ime benefi s. The subsequen s ong employ-
men g ow h a e he pandemic, on he o he hand, was due mainly o an inc ease in
egula employmen (i.e. employmen subjec o social secu i y con ibu ions).
Empi ically, i is non- i ial o dis inguish whe he diffe ences be ween sec o s
du ing he COVID-19 pandemic we e caused pa ly by he minimum wage o solely by
he pandemic. The posi i e de elopmen o employmen a e he pandemic in
5Sho - ime wo k p o ides a wage eplacemen benefi h ough he Ge man unemploymen in-
su ance sys em, wi h he aim o p e en ing unemploymen in he e en o a empo a y loss o
wo king hou s. En i lemen o sho - ime wo k kicks in i he egula weekly wo king hou s in a
company a e empo a ily educed o economic easons o because o an una oidable e en . To
mi iga e he economic consequences o he co ona i us pandemic, he ede al go e nmen decided
in 2020 on empo a y enhancemen s ha we e epea edly ex ended. Access o sho - ime wo k was
made easie o a limi ed pe iod, mos ecen ly un il he end o June 2023, and i s du a ion was
ex ended o a limi ed pe iod, mos ecen ly un il June 2022, om 12 o 28 mon hs. The amoun o he
benefi was inc eased o a limi ed pe iod and mos ecen ly un il June 2022 om 60 pe cen (67
pe cen o wo ke s wi h a leas one child) o he los ne pay o 70 pe cen (77 pe cen ) om he 4 h
mon h o eceip and 80 pe cen (87 pe cen ) om he 7 h mon h o eceip . O he social secu i y
paymen s made by employe s o hei sho - ime wo ke s, 100 pe cen we e eimbu sed by he
unemploymen insu ance sys em un il Decembe 2021, and 50 pe cen we e eimbu sed un il Ma ch
2022.
The Minimum Wage in Ge many 133
sec o s highly affec ed by he minimum wage sugges s he la e . In he causal s udies
lis ed below, indica o s o he pandemic we e used o sepa a e he effec s o he
pandemic and he minimum wage.
Nume ous causal analyses a e a ailable on he effec s o he s a u o y mini-
mum wage on employmen . These s udies in es iga e diffe en ime ho izons om
hei in oduc ion in 2015 and 2016 o subsequen inc eases and up o Janua y 2022
(Table 3). To a ce ain ex en , he analyses apply diffe en iden ifica ion me hods,
use diffe en da abases and examine diffe en ou come a iables. This is again
indica edby hesupe sc ip le e sandnumbe s.
-6,0
-5,0
-4,0
-3,0
-2,0
-1,0
0,0
1,0
2,0
3,0
4,0
2014
2015
2016
2017
2018
Q1/2019
Q2/2019
Q3/2019
Q4/2019
Q1/2020
Q2/2020
Q3/2020
Q4/2020
Q1/2021
Q2/2021
Q3/2021
Q4/2021
Q1/2022
Q2/2022
Wes Ge many
Highly a ec ed sec o s Less a ec ed sec o s
-6,0
-5,0
-4,0
-3,0
-2,0
-1,0
0,0
1,0
2,0
3,0
4,0
2014
2015
2016
2017
2018
Q1/2019
Q2/2019
Q3/2019
Q4/2019
Q1/2020
Q2/2020
Q3/2020
Q4/2020
Q1/2021
Q2/2021
Q3/2021
Q4/2021
Q1/2022
Q2/2022
Eas Ge many
Highly a ec ed sec o s Less a ec ed sec o s
Figu e 4: De elopmen o o al employmen . Sou ce: S a is ics o he ede al employmen agency, own
calcula ions.
134 M. Dü sch e al.
Table :Causal effec on employmen .
Regula employmen Ma ginal
employmen
To al employmen ( eg-
ula and ma ginal
employmen )
Minimum wage Yea
In oduc ion
()
−. %aXe
Caliendo e al.
(: .)
.%aXe
S eche
(:)
. %aXe
Ga loff
(:)
. %aXe
Hol emölle and
Pohle (:)
n.s.%aXe
Schmi z
(:)
.%aYe
F ied ich (:)
−. %aXe
Caliendo e al.
(: .)
−.%aXe
S eche (:)
−. %aXe
Ga loff(:)
−. %aXe
Hol emölle and Pohle
(:)
−.%aXe
Schmi z (:)
n.s.aYe
−.% in Eas
Ge manyaYe
F ied ich (: .)
−. %aXe
Caliendo e al. (: .)
−.%bYe
Bossle e al. (:)
−.%bYe
Bossle and Ge ne
(:)
n.s.bYe
Bossle , Gü zgen, and
Bö schlein (:)
n.s.bYe
Bossle e al. (:)
n.s.aXYe
Bossle and Schank
(:)
. %aXe
S eche (:)
.ppaY
Dus mann e al.
(:)
n.s.aXe
Dus mann e al.
(:)
n.s.bXe
Link (:)
. %aXe
Ahl eld , Duncan, and
Seidel (, appendix
able A)
n.s.aXe
Bonin e al. (:)
−.%aXe
Bonin e al. (:)
−.%aXe
Bonin e al. (:)
−.%bYe
Bossle e al. (:)
n.s.bYe
Bossle , Gü zgen, and
Bö schlein (:)
n.s.bYe
Bossle e al. (:)
n.s.aXYe
Bossle and Schank (:
)
The Minimum Wage in Ge many 135
Table :(con inued)
Regula employmen Ma ginal
employmen
To al employmen ( eg-
ula and ma ginal
employmen )
Minimum wage Yea
. %aXe
Ahl eld , Duncan, and
Seidel (:)
−.%bYe
Bossle , Gü zgen, and
Bö schlein (:)
−.%bYe
(Bossle e al. :)
n.s.aXYe
Bossle and Schank (:
)
−.%bYe
Bossle , Gü zgen, and
Bö schlein (:)
−.%bYe
Bossle e al. (:)
n.s.aXe
Pes el e al. (:)
−.%aXe
Pes el e al. (:)
−.%bYe
Bossle e al. (:)
−.%aXe
Pes el e al. (:)
−.%bYe
Bossle e al. (:)
n.s.aXe
Caliendo, Ol haus, and
Pes el (:)
n.s.bYe
Ispho ding e al. (:
)
−.%aXe
Caliendo, Ol haus, and
Pes el (:)
−.%bYe
Ispho ding e al. (:
)
−.%aXe
Caliendo, Ol haus, and
Pes el (:)
−.%bYe
Ispho ding e al. (:)
n.s.aXe
Caliendo, Ol haus, and
Pes el (a: )
−.%aXe
Caliendo, Ol haus, and
Pes el (a: )
−.%aXe
Caliendo, Ol haus, and
Pes el (a: )
Fi s inc ease n.s.aXe
Caliendo, Ol haus, and
Pes el (:)
n.s.aYe
F ied ich (:)
−.%aXe
Caliendo, Ol haus, and
Pes el (:)
n.s.aYe
−.% in Eas
Ge manyaYe
F ied ich (:,
)
n.s.aXe
Caliendo, Ol haus, and
Pes el (:)
n.s.aXe
Caliendo, Ol haus, and
Pes el (a: )
−.%bYe
Bossle , Gü zgen, and
Bö schlein (:)
136 M. Dü sch e al.
o he wage dis ibu ion. Howe e , hey de ec ed a nega i e effec o employees wi h
ea nings jus abo e he minimum wage.
Ano he aspec o compe i ion is in es men . Resea ch shows ha he in oduc-
ion o he minimum wage had a sho - e m nega i e impac on in es men s bu no
longe -las ing nega i e effec s (Bossle , Gü zgen, and Bö schlein 2020: 63ff.; Bossle
e al. 2022: 88ff.). To al in es men in companies affec ed by he minimum wage
dec eased by app oxima ely 40 pe cen in 2015 in compa ison o ha in unaffec ed
companies bu did no u he dec ease a e he minimum wage inc eases in he
pe iod om 2017 o 2019. Ob iously, companies affec ed by he minimum wage
wi hheld in es men s as an immedia e eac ion o he in oduc ion o he minimum
wage, while in es men beha iou in la e yea s was no longe influenced by he
minimum wage.
Fu he mo e, acco ding o he s udies by Bossle e al. (2020, 2022), p ofi s ell
due o he in oduc ion o he minimum wage. In he pe iod om 2015 o 2019, he
in oduc ion o he minimum wage led o a educ ion in p ofi abili y o app oxi-
ma ely 6.6 pe cen and jus unde 9 pe cen in affec ed companies (Bossle e al. 2018:
97 .; Bossle , Gü zgen, and Bö schlein 2020: 59; Bossle e al. 2022: 76ff.). This finding
can be explained by he ac ha pe sonnel cos s inc eased due o he minimum
wage, while p oduc i i y did no change. The decline in p ofi s due o he in o-
duc ion o he minimum wage was g ea e in 2016 han in 2015. In a diffe en ia ed
es ima ion, he effec was confi med only o eas e n Ge many, no o wes e n
Ge many, and only o companies wi h high compe i i e p essu e, no o companies
wi hou i . In con as , he inc eases in he minimum wage in 2017 and 2019 had no
s a is ically significan effec s on business p ofi abili y.
The in oduc ion and inc eases o he minimum wage may ha e influenced
company s a -ups and closu es and hence he in ensi y o compe i ion be ween
businesses. O e all, company de egis a ions and insol ency p oceedings ha e
declined con inuously since 2015 (Mindes lohnkommission 2023: 195). The ends in
company de egis a ions and insol encies in minimum wage sec o s we e simila o
hose in he economy o e all. Findings om causal s udies sugges a mos mode a e
effec s o he minimum wage on company densi y and he ma ke en y a es o
companies. Howe e , a ious causal s udies poin o mic obusiness closu es due o
he minimum wage. Acco ding o he Mannheim Business Panel, a sligh educ ion in
he numbe o companies esul ed om he in oduc ion o he minimum wage, bu
no impac on company densi y was ound (De Mon e e al. 2022). An inc ease in he
minimum wage in 2017 did no ha e an independen effec on he numbe o com-
panies o company densi y. A sepa a e analysis o o e all ma ke en y and exi a es
a he egional le el did no sugges any minimum wage effec s. Howe e , a subdi-
ision by size class e ealed a minimum wage-induced inc ease in ma ke exi s
among mic obusinesses wi h up o ou dependen employees. These findings a e
The Minimum Wage in Ge many 143
consis en wi h he esul s o Dus mann e al. (2022) and Bossle e al. (2022: 148ff.),
who also iden ified an inc ease in ma ke exi s by mic obusinesses due o he
in oduc ion o he minimum wage. In addi ion, he a e age size o companies in
egions mo e affec ed by he minimum wage inc eased as employees ea ning less
han 8.50 eu os pe hou mo ed om mic obusinesses o la ge companies. Thus,
he e we e changes in he size s uc u e o companies because o he in oduc ion
o he minimum wage. On he basis o analyses o da a based on he IEB, Ispho ding
e al. (2022: 74ff.) we e unable o de e mine any minimum wage effec s on he
closu e o companies –ei he o e all o o small companies.
5 Conclusion and Ou look
The minimum wage in Ge many was in oduced in 2015. I binds uni e sally wi h
only a ew excep ions, some o which we e limi ed in ime. The Minimum Wage Law
es ablished adjus men s in a 2-yea cycle o be se by he Minimum Wage Commis-
sion. This was in ended o make o wa d planning easie o companies and o
social pa ne s in collec i e ba gaining. The s uc u e and composi ion o he Min-
imum Wage Commission ollow he social pa ne ship logic ha has cha ac e ized
indus ial ela ions in Ge many since he end o he Second Wo ld Wa . Conse-
quen ly, employe ep esen a i es and ade unions decide join ly and indepen-
den ly o he s a e on minimum wage adjus men s. One consequence o his was ha
he adjus men s o he minimum wage in 2016, 2018 and 2020 s ic ly ollowed pas
de elopmen s o collec i ely nego ia ed wages. Due o a g owing poli ical pe cep ion
ha he minimum wage was oo low on he one hand and ailwinds om he deba e
abou he ini ia i e on adequa e minimum wages in he Eu opean Union on he o he
hand, he s a u o y minimum wage was inc eased by pa liamen o 12 eu os on 1
Oc obe 2022. A e his one- ime in e en ion, he go e nmen handed back he
au ho i y o u u e adjus men s o he Minimum Wage Commission. Acco dingly,
he commission decided in June 2023 o u he inc ease he minimum wage le el up
o 12.41 eu os om he beginning o 2024 and o 12.82 eu os in 2025.
Ten yea s a e he in oduc ion o he s a u o y minimum wage, comp ehensi e
e idence on he causal effec s o he minimum wage allows us o poin ou se e al
solid insigh s. The s onges effec s o he minimum wage we e hus a obse ed
a e i s in oduc ion. In acco dance wi h he dep h o in e en ion o he minimum
wage in he wage s uc u e, app oxima ely 4 million employees benefi ed, and
app oxima ely 12 pe cen o he companies we e equi ed o make adjus men s.
Hou ly wages calcula ed on he basis o con ac ual wo king hou s inc eased due o
he in oduc ion o he minimum wage. This was accompanied by a dec ease in
con ac ual wo king hou s. Acco dingly, he findings on he effec s on mon hly
144 M. Dü sch e al.
wages emain ambiguous. The in oduc ion o he minimum wage had delayed
nega i e effec s on bo h con ac ual and ac ual wo king hou s, bu he e is no
conclusi e e idence on he minimum wage effec s on hou ly wages measu ed on
he basis o ac ual wo king hou s. Howe e , he inc eases in con ac ual hou ly
wages we e mi o ed by an inc ease in wage cos s and a educ ion in p ofi s o
companies. By li ing he bo om o he wage scale, he minimum wage educed he
wage dispe sion in Ge many. Mic obusinesses and hose unde compe i i e p es-
su e expe ienced he mos s ess om he in oduc ion o he minimum wage. This
led o heclosu eo mic obusinessesdue o heminimumwage.Due os ong
economic g ow h in he yea s a e i s in oduc ion, he minimum wage had no
ad e se effec s on o e all employmen o unemploymen le els. Compa ed o he
impac upon in oduc ion, he effec o he subsequen adjus men s by he Mini-
mum Wage Commission on all o hese a iables was much smalle and he e o e
also mo e inconsis en .
In iew o he causal findings hus a , nume ous open ques ions emain. This
conce ns wage and wo king ime effec s o ma ginal g oups in he labou ma ke ,
which canno be ho oughly examined causally due o he small numbe o cases in
he GSOEP. Such causal s udies can be ca ied ou in u u e e alua ions wi h da a
om he new Ea nings Su ey (ES), which was in oduced in 2021. Ano he majo
p oblem is he alid measu emen o wo king hou s o , al e na i ely, he o al lack o
in o ma ion on wo king hou s in ce ain da ase s. This limi a ion canno be eme-
died e ospec i ely and will emain a majo challenge o u u e minimum wage
esea ch. The e is also ha dly any e idence on he effec s o he minimum wage on
oca ional aining pa icipa ion among young adul s. A he company le el, mini-
mum wage- ela ed changes in oca ional aining and u he aining a e la gely
unexplo ed. Finally, he e is ha dly any e idence on he effec s o he Ge man
minimum wage on consume p ices.
Resea ch on he Ge man minimum wage will now inc easingly ocus on cu en
de elopmen s. These include he economic dis o ions caused by he co ona i us
pandemic and he wa in Uk aine as well as he (simul aneous) sha p inc ease in he
minimum wage o 12 eu os. A legisla i e inc ease in he minimum wage o 12 eu os
affec ed app oxima ely 5.8 million employees and app oxima ely 23 pe cen o he
companies in Ge many. I hus had a g ea e impac han he in oduc ion o he
minimum wage. Based on he p e ious minimum wage o 10.45 eu os in July 2022,
his ep esen s an inc ease o app oxima ely 15 pe cen . In eal e ms, his figu e
cons i u ed an inc ease o app oxima ely 13 pe cen . Depending on which da a a e
used, he Ge man minimum wage is now jus below o jus abo e he in e na ionally
used benchma k o adequa e minimum wages o 60 pe cen o he median wage,
which is also men ioned in he EU di ec i e on adequa e minimum wages in he
Eu opean Union. Based on da a o ull- ime employees om he ES, he minimum
The Minimum Wage in Ge many 145
wage amoun ed o app oxima ely 56 pe cen o he median wage in Oc obe 2022.
Using da a o all employees om he same da a sou ce, he minimum wage eached
app oxima ely 63 pe cen o he median wage.
The economic en i onmen and labou supply and demand ha e changed
significan ly since he in oduc ion o he minimum wage. The Ge man economy
may no e u n o he g ow h a es obse ed om 2015 o 2018 in he o eseeable
u u e. Mo eo e , coun e ing he effec s o sluggish economic g ow h, he e is a
sho age o labou h oughou he en i e economy due o demog aphic changes.
Fu u e esea ch will hus ha e o answe he ques ions o how he inc ease in he
minimum wage o 12 eu os in e ac s wi h hese changed condi ions a he mac o
le el and whe he his inc ease has led o a con inua ion o p e ious minimum
wage effec s o whe he i s effec s diffe in na u e and scope.
Acknowledgmen s: We a e g a e ul o he edi o and he wo anonymous e iewe s
o hei help ul commen s. The iews exp essed in his pape a e hose o he
au ho s.
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This a icle is pa o he special issue “Minimum Wages –Expe iences o Eu opean Coun ies”published
in he Jou nal o Economics and S a is ics. Access o u he a icles o his special issue can be
ob ained a www.deg uy e .com/jbns .
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