Minimum Wage: Number of Eligible Employees Well Below Five Million

In the fall of 2013, DIW Berlin presented a study on minimum wages which was based on data from the Socio-Economic Panel Study for 2011. The data for 2012 have since become available. As expected, in terms of structures for employees with gross hourly earnings of less than 8.50 euros, i.e., those expected to receive the planned minimum wage, little has changed. These include, to an above-average degree, employees with simple occupations, women, employees in eastern Germany, mini-jobbers, working pensioners, and students. In particular, the minimum wage affects workers in small businesses, consumer-oriented services, and agriculture. In 2012, 5.2 million workers received a gross hourly wage of less than 8.50 euros, equivalent to 15 percent of all employees. There is evidence that the number of low-wage workers has decreased over the previous year - to about half a million. However, a statistically significant decline is only evident among full-time workers and workers engaged in simple occupations. These account for more than half of all low-wage workers. It is significant that a large proportion of workers earning less than 8.50 euros per hour in 2011 were above the minimum wage threshold in 2012 - as a result of wage increases. Their number is now likely to have declined due to further wage increases and will have fallen again by up to 700,000 by the time the minimum wage is introduced. In addition, there has been a decline in simple occupations, i.e., jobs that often only pay low wages. It is politically controversial as to whether certain groups will be excluded from the future minimum wage regulation - if pensioners and students were excluded, the number of people entitled to a minimum wage would be reduced by yet another million.