DW, 18
February 2020
 |
| Person doing dishes (picture-alliance/dpa/P. Seeger) |
The
introduction of a nationwide minimum wage in Germany has spurred a growth in
worker productivity, according to a study published Tuesday.
The
government in Berlin first established a minimum wage in 2015, requiring firms
to pay their employees €8.50 ($9.20) per hour. At the time, around 15% of the
German workforce was earning less than that amount.
Research by
University College London (UCL) and the German Institute for Labor Market
Research (AIB) found that the change did not result in higher joblessness among
low-wage workers — one of the fears before the policy was rolled out.
"Contrary
to concerns that marked the debate before the national minimum wage was
introduced, we did not find that it led to a reduction in employment," UCL
researcher Christian Dustmann said in a statement.
Instead,
their analysis showed that lower-paid employees moved to bigger firms, where
more full-time jobs requiring better qualifications were on offer.
"The
minimum wage increased productivity by redistributing workers from less
productive to more productive companies," Dustmann said. The average size
of companies grew, as did the average number of workers at bigger firms.
Read more:
EU launches 'fair minimum wage' initiative
Smaller
businesses exit the market
The
nationwide standard helped decrease pay gaps across regions, the study found.
However, it also forced the closure of some small businesses — those with three
or fewer staff — in areas that had the lowest pre-2015 average pay.
Since 2015,
the minimum wage has grown from €8.50 to €9.35, and is set to be revised again
next year.
It was
introduced at a time when the German economy was enjoying a long period of
growth, with unemployment at its lowest level in 25 years. Dustmann warned that
for that reason the study's findings "do not necessarily generalize to
other labor markets, or other time periods."
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