Minimum wage, qualifications and employment

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Presentation transcript:

Minimum wage, qualifications and employment Dr. Gabriele Sterkel ver.di (united service sector union)

Low wages €/h in collective agreements (lowest level) (less than 7,50 €: „Poverty wage“ below 50% of national average earnings - in 2004)

Expected effects of a 7,50 €/h minimum wage (IAQ/SOEP 2006) 5,5 million employees (from 31 totally) with payraise 2,3 million fulltime workers 30% of all employees in East - 15% in West Germany Two thirds women

What sectors concerned? From all employees below 7,50 €/h are working in Retail trade 18,2% Enterprise related services 11,7% Health- and social sector 10,4% Gastronomy 8,7% From all employees in the sector are working below 7,50 € In Gastronomy 50,6% In enterprise related services 29,5% In retail trade 28% In health- and social sector 12,2%

Macroeconomic effects : rise of employment! Introduction of a minimum wage of 7,50 €/h will bring rise of employment short- and middle-term: 450.000 workers longterm: 100.000 workers (Macroeconomic simulation study including effects of demand with higher wages, Klaus Bartsch)

UK: Gowth of minimum wage and of employment Increase of statutory minimum wage of 49% Decrease of unemployment rate of about 21%

Real wage development in % in comparison with previous year

German export surplus

Wage share of national income Upward trend does not reach employees

Wage costs/h in private service sector in 2006

rapid growth of german low wage sector - already every 5th employee concerned -

Low wage sector in Germany is growing faster than in any other country Low wage sector in Germany is growing faster than in any other country! (IAQ/SOEP 2008-1) 22% of all employees in Germany have been working in the low wage sector in 2006 1995: 15% (increase of 43%) Low wage: 2/3 of median wage (WestG 6,89 €; EastG 4,86 €) International comparison: GB 22%; USA 25% Structure: 70% women 15% full time

Qualification sares in the low wage sector

Qualification in the german low wage sector increasing (IAQ/SOEP 2008-1) ¾ of all low wage employees are formally qualified Professional or academic qualification Between 1995 and 2006 the share of low qualified in the low wage sector decreased about 7%

Wage per hour in german low wage sector is decreasing (IAQ/SOEP 2008-1) Downward differenciation of wages Increase of wages below 5 € From 1,5 million workers in 2004 to 1,9 million in 2006 Growing difference between East and West

WSI

Minimum wages in % of national median and average wages (WSI 2006) in % of median wage in % of average wage Frankreich 62% 47% Luxemburg 53% 41% Belgien 51% 40% Irland 48% 52% Ungarn 39% Großbritannien 45% 35% Slowakei 36% Niederlande 44%* 46% Portugal Polen 42%* 37% Tschechien Griechenland 39%* Spanien