Home > Uncategorized > What Macron should know about the win-win-win-win-win consequences of the new German minimum wage

What Macron should know about the win-win-win-win-win consequences of the new German minimum wage

Recently, Germany introduced an economy wide minimum wage. This led to better jobs, better incomes, an increase in productivity, no upsurge in inflation and no decline of employment growth:

“Higher wages, shorter hours The comparison of both worker groups shows that the minimum wage has worked. As intended, the hourly wage of the interviewed minimum wage workers rose from €6.70 to €8.20, an impressive 22 percent. This is a multiple of the wage increase in the control group, which amounted to 4 percent. However, this also shows that the average hourly wage had not yet reached the minimum wage of €8.50, which is not due to exemptions from the minimum wage (we excluded these from the data). At the same time, weekly working hours of minimum wage workers fell by 90 minutes, whereas working time in the control group increased somewhat. In particular, the share of employees with very long working hours of more than 45 fell markedly. This also runs counter to the trend of the control group. Finally, despite lower average working hours, the monthly gross wage climbed from roughly €840 to €990. This is important, since it is the gross wage more than the hourly wage that matters for being able to meet living expenses.

Happier despite higher workload

These results paint the minimum wage in glowing colours for affected workers. However, how did companies react? Manager interviews conducted in another IAB survey showed that firms focused more on raising worker productivity than on layoffs. Our results confirm this from a worker perspective.”

  1. philippe frémeaux
    July 12, 2017 at 9:51 am

    Not a comment, but a question : the minimum wage in Germany is still very low if you compare with the french level. What would be the effect if it would be rise to the french level ? As fas as the largest part of these jobs are in services, services in which productivity cannot be enhanced. If the metal industry male worker is no more able to buy several hours of services female workers with his hourly wage, demand of services will decrease. The only solution to unemployment in low growth economies is less inequality and decreased of the number of hours of labour for all ! Philippe Frémeaux columnist at Alternatives Economiques magazine (sorry for my english)

  2. July 12, 2017 at 2:53 pm

    Easy for Germany to do as it has a comfortable trade surplus. If Greece did it, better-paid workers would use it to buy even more imports and the money would leak out of the economy, making jobs unsustainable. Minimum wage works so long as it gets recycled locally.

  3. July 19, 2017 at 11:58 am

    I fail to understand why almost nobody in Uhmerkuh (my homeland, the so-called US of A) ever talks about the great success of the Swiss ‘Mincome’ program. Now, I wonder why it is not the model most talked about world-wide — well, at least not by the wisest economists. After all, by now we should all know that about 70% of what drives any thriving, robust cultural ‘economy’ is the retail spending of thriving middle-class citizens. Shouldn’t we? Regardless of theoretical rhetoric and BS rubrics… Right?

    Let’s also remember that the Swiss Mincome was not initiated by ‘progressives’ but by true Conservatives (evidently completely unlike bogus conservatives or Neo-Cons). It began there by giving away gold coins piled high in a large dump truck, which dumped them into a large urban plaza, for all to come and take, freely, no regs or limits. Initially, the base level Mincome for Swiss citizens was set at about $2250 per month, US$ equivalent. That certainly is a nice livable number for a decent life, with savings and ample surplus to spend on enjoying the positive benefits of a healthy culture. Apparently, it worked so well that Finland has instituted their own Mincome solution.

    The only thing that I can think of that may explain why this is obviously generally ignored by a vast majority of humanoids outside Switzerland and Finland is a kind of mass-hypgnosis or demonic possession or the equivalent. I don’t mean to seem rude, but of the majority of my fellow Uhmerkuns, I can say that may be close to accurate. Yet, seemingly, about 40% of them must simply be mean spirited morons who have no interest in a decent quality of life, and clearly no interest in or knowledge of how much better a high quality culture would support the wellness and happiness of their own families and friends.

    Hmmm… After all these years and threads, from the beginning of the post-autistic economics movement begun by passionately humane French students (of economics cum plutonomics), it seems we should be enjoying a much livelier, more effective level of discussion — of realities — not just impotent sophistries cloaked in a veneer of academic technicality.

    So, though I am now quite sure that my solution has been studiously ignored or rejected by all professional Plutonomists and even the 4 or 5 seemingly compassionate ‘economists’ out there in cyber-space, I suggest that those of you who harbor a spark of humane compassion join me in mounting a new movement, a post-post-autistic plutonomics initiative.

    What would that look like? Well, I’m not sure, but there’s only 1 way to find out. However, I suggest we start by redefining sanity and insanity, in order to clarify the difference between humanity and normative neurosis and ecocidal and/or ethicidal mass-psychosis.

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