Almost nothing speaks against a higher minimum wage
Norbert Haering - norberthaering.de
Before 2015 introduced a general minimum wage floor of 8,50 Euro in January in Germany, German economists had sharply criticized the plans and predicted high losses of employment that never materialized. Practically the entire economic mainstream joined in, led by the Council of Experts, who did not shy away from public delusion. Now that the union and left-wing camps are calling for an increase to 12,50 euros, the old, discretized arguments continue unabashedly. The simple logic of minimum wage warnings: when labor becomes more expensive, fewer workers are in demand. Who brings less than he costs under the new scheme will be unemployed. The critics predicted the loss of 500.000 up to more than one million jobs through the minimum wage bill. For example, Andreas Knabe, Ronnie Schöb and Marcel Thun predicted that 2014 will lose half a million mini-jobs, 250.000 social security contributions and 90.000 retiree and student jobs in its standard model. However, they did not take it so seriously when it came to disclosing links with the New Social Market Economy (INSM) initiative. The Expert Advisory Council on Economic Development, in its annual report since 2004, wrote against the minimum wage arguing that it would cost a lot of jobs. When that did not happen, he first wrote that it was too early for a final judgment, and then spread the mantle of silence over the inglorious story. The Association for Social Policy, the leading German-speaking economists' association, has devoted a special issue to its magazine “German Economic Review” to the question of whether and how many jobs the lower wage limit has actually cost. The critics are at first sight against it. Employment increased strongly in the year of introduction of the minimum wage and in subsequent years. Of course, this can not be attributed directly to the minimum wage introduction. It is possible that the good economic situation would have created even more jobs if the minimum wage had not been introduced. In order to isolate the influence of the lower wage limit, empirical studies compare how employment development was where the minimum wage plays a major role and how it was where it plays little or no role, because the general wage level is too high. Group formation may be based on regions, ie low-wage regions versus high-wage regions, or by economic activity, or on the personal characteristics of employees. Effect can go in both directions. Theoretically, both positive and negative effects of the minimum wage can be based on employment. The theoretical model favored by critics assumes that there is almost complete competition on goods and labor markets. There would then be no distribution of profits and employees would be compensated with the income their work produces. If, under such conditions, employers are forced to pay more for low-wage earners, their jobs are rationalized because they are no longer worthwhile. The most important model of competition assumes that employers have market power as job-seekers to varying degrees. This is mainly due to the fact that workers in commuting have only a very limited selection of potential employers and job vacancies. Restricted competition allows employers to keep wages low and thereby increase their profits. A provision to increase the lowest wages does not therefore mean that jobs are no longer worthwhile for employers. In theory, it can lead to more people hiring. Because the usual effect of having to offer higher wages to fill more jobs is eliminated if wages are raised anyway. If you have to pay more anyway, you can also hire as many people as you can get at the higher salary. Two contributions with a very similar methodology by Alfred Garloff from the Institute for Employment Research and Sebastian Schmitz from the Ministry of Labor are symptomatic of this Spectrum of results. Both use the share of low paid workers in different regions to isolate the effects of the minimum wage. They compared the development of employment in regions with a high share of wages below the future minimum wage with those in regions with a higher wage level, where the minimum wage is less strong. Garloff further refined the peer groups by including age and gender, which are affected to varying degrees by the minimum wage. He identifies a slightly positive effect of the minimum wage introduction on employment. For Schmitz, the effect is slightly negative. Schmitz, who created the study before taking up his ministry position, agrees with Garloff that the effects found in both cases are so small that one can agree not to have identified any economically significant effect. In a review article, Marco Caliendo, Carsten Schröder and Linda Wittbrodt summarize the results of these two and a number of other studies so that empirical studies identify either a weak-negative or non-existent impact of the minimum wage on employment. Clearly negative is only the influence on the number of mini-jobs, but in any case not enjoy the best reputation as a labor market segment. Both normal employment relationships ranged from negative to slightly positive. Impactless evaluation. In the UK, where there has been a minimum wage since 20 years, a so-called low-wage commission has been commissioned to evaluate the scientific studies on the effects. On the basis of its recommendation, the minimum wage should be increased as much as possible without damaging employment prospects. In a recent report on 20's minimum wage, the Commission notes that the lower wage limit has reversed the trend prevailing to 1999 that low pay groups continue to fall behind. After all, 30 percent of workers would have benefited from the minimum wage, either directly or indirectly, because the upwardly adjacent wage groups were better paid to maintain the gap to the minimum wage. “The Low Wage Commission found no significant negative effects of the minimum wage increases on employment,” she concludes. The legal minimum between 2010 and 2017 alone has been raised from 46 percent of median pay to 54 percent. According to a comparison of the industrialized countries organization OECD, the UK is more in the upper range of countries with a minimum wage. In Germany, he was significantly lower with 48 percent compared to the average wage. If the German minimum wage commission had the same mandate as the British Low Pay Commission, then the data would probably argue for a disproportionate increase in the minimum wage relative to the general wage development. But the German Commission does not have this mandate, so that the impact studies here have much less economic significance. The German Commission, which is filled with employer and trade union representatives as well as scientists, is only supposed to adjust the minimum wage of general wage developments.
Why there is no increase in the minimum wage
Andreas Triebel - andreastriebel.de
Although the adjustment of the minimum wage was handed over to the Kommosion by the Merkel and SPD governments, it was provided with enough provisions that no noticeable increase has been made so far.
It can never happen because otherwise the entire wage structure in which our class society is reflected is endangered. The factory director (he is called CEO) earns several hundred times the pay of a simple worker. And in the event of bankruptcy, the worker has to go to the office and ask for support, while the chief executive receives a high severance pay. This system stabilizes our society, and the pay barnation commission knows this very well. There are a few economists can justify so well why from a macroeconomic point of view, a noticeable increase to twelve or sixteen euros would be necessary and reasonable, they can never penetrate, because the preservation of our social fabric is always important. The subclass must be clear about who governs above and who has to follow below. A demoralized subclass is docile and can be controlled. She should believe that she is to blame for her own fate. She could have formed more. At the last election to the Bundestag propagated the SPD education for all. As if education for all would change the ownership. There are already enough taxi drivers who have a university degree, but they do not have a chance to get a higher paid job. And the unions have no real power.
It dominates the ideology of neoliberalism, which states that the market would balance the social forces. Behind this lies only a justification of the present relations of domination.