The statutory minimum wage has the task of preventing ruinous competition between companies through wage dumping and at the same time providing minimum protection for employees. Minimum protection must take into account the maintenance of purchasing power through the wage level. To ensure that minimum wage earners cannot buy less of their income, wages must rise at least in line with inflation. The increase in the statutory minimum wage by 41 cents to €12.41 from 1 January 2024 (and by a further 41 cents one year later) does not provide this protection. The wage will only increase by 3.4%, while inflation will rise by between 9.7% and 10.9% since the current minimum wage of €12 was set on 1 October 2022, depending on the calculation model. It must also be taken into account that inflation for food and everyday goods, on which low-income earners spend a large proportion of their income, is almost twice as high. Minimum wage earners therefore have to accept a significant drop in income despite the wage increase. It is therefore understandable that the decision of the Minimum Wage Commission is unacceptable for trade unions and employees.
This small increase in the minimum wage has a particularly negative impact on our region in the north-west, as low-wage sectors are disproportionately well represented here. This also reduces regional purchasing power. And it is doubtful whether employers have done themselves a favour by pointing out that the cost burden is too high. Companies in the low-wage sector in particular are desperately looking for employees, especially service staff in the hospitality industry and lorry drivers in the logistics sector. Employees have literally "fled" these sectors in recent years due to low wages.
The statutory minimum wage is an important instrument for limiting downward competition. The fears of job losses and an increase in unemployment figures, which were shared by many neoclassical economists, have not materialised. On the contrary: in many sectors, the minimum wage has led to an increase in employment. Nevertheless, the level of the minimum wage was not sufficient to ensure poverty-proof wages. In order to achieve this, Germany is required to implement the EU minimum wage directive by the end of 2024 anyway. This means that the minimum wage must reach at least the level of 60% of the average income (median). Based on today's average income, the minimum wage should then be closer to €14.
Dr Uwe Kröcher, Head of the Office for University and Trade Union Co-operation at the University of Oldenburg, 28 June 2023
The NWZ used parts of the commentary on 3 July 2023 in a report on the reactions to the minimum wage decision(NWZ report).