Is Germany’s minimum wage really helping to reduce salary gap between rich and poor?

It is a problem that has caused anger across the western world. Top earners are receiving ever more money for their work while low-income wages are stagnating


0
Is Germany's minimum wage really helping to reduce salary gap between rich and poor? 1

Statistics released this week by Destatis show that the trend in Germany is heading in the opposite direction – at least for hourly wages.

Whereas in 2014 someone classified as a top earner was taking home 3.48 times the hourly wage of a low earner, that difference dropped to 3.27 in 2018.

Put another way, the average hourly wage of a low income earner (someone in the bottom 10 percent of the wage scale) rose from €8.34 per hour to €9.71 between 2014 and 2018. At the same time, the wage of a top earner (someone in the top 10 percent) increased from €29.03 to €31.76 per hour. 

“One reason for this development is the introduction of the statutory minimum wage on January 1, 2015,” Destatis states. In 2018, the minimum wage was €8.84 and it currently stands at €9.35.

The reduction of the wage gap was particularly pronounced in eastern Germany, where the percentage of people considered low income earners dropped from 34.5 percent to 29.1 percent.

At the same time there are still roughly twice as many high earners in former West Germany as there are in the east.

Smaller change than expected

Experts have cautioned though that good news from the statistics office doesn't necessarily mean that poorer people now have more money in their pocket.

Daniel Eckert, finance editor at Die Welt, reports that companies have reduced employees’ working hours since the minimum wage was introduced, meaning that although the gap in hourly wage has narrowed, the difference in monthly income between rich and poor has not changed.

Eckert also argues that the stagnation of wages in the top sector is not necessarily a good sign, as increases here are a signal that Germany’s companies well-paying sectors such as IT are enjoying international success.


Like it? Share with your friends!

0

What's Your Reaction?

hate hate
0
hate
confused confused
0
confused
fail fail
0
fail
fun fun
0
fun
geeky geeky
0
geeky
love love
0
love
lol lol
0
lol
omg omg
0
omg
win win
0
win
Webmaster One

0 Comments

Your email address will not be published. Required fields are marked *

Choose A Format
Personality quiz
Series of questions that intends to reveal something about the personality
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Poll
Voting to make decisions or determine opinions
Story
Formatted Text with Embeds and Visuals
List
The Classic Internet Listicles
Countdown
The Classic Internet Countdowns
Open List
Submit your own item and vote up for the best submission
Ranked List
Upvote or downvote to decide the best list item
Meme
Upload your own images to make custom memes
Video
Youtube, Vimeo or Vine Embeds
Audio
Soundcloud or Mixcloud Embeds
Image
Photo or GIF
Gif
GIF format