A Minimum Wage for Germany: What Should We Expect?

Abstract

A key component of the coalition agreement between the CDU/CSU and SPD signed on November 27 is the adoption of a minimum wage for Germany. Under the agreement, a statutory minimum wage of €8.50 per hour will be introduced across the country starting in 2017. Pushed as a make-or-break issue by the SPD during the negotiations, its introductionfollows months of heated debate about its desirability and potential consequences. Although economists have yet to reach a consensus on the issue, the recent experience of the UK provides some valuable insights about what we should expect from the introduction of a minimum wage in Germany.