Raising the minimum wage: Respect! What respect?

The tiny increase in the minimum wage is wrong. It contradicts economic, social and political reason.

Anyone who earns minimum wage spends it immediately – and doesn’t put anything on the high edge Photo: H. Richter/McPHOTO/blickwinkel/imago

The minimum wage is being raised very cautiously by 41 cents. There are two reasons that may suggest a measured increase. The low-wage sector, which exploded with Agenda 2010, has shrunk a little. Low-wage earners are those who earn less than 12.50 euros an hour. That was around 21 percent of employees in 2018, and 19 percent in 2002. The trend is encouraging. However, it is unacceptable that almost a fifth can hardly live from work – let alone draw a useful pension.

A second reason for a cautious increase may be that the effects of the increase to 12 euros have not yet been researched. It is possible that jobs have been lost in individual sectors. Based on past experience, that’s probably not the case.

There are, however, a multitude of reasons why this small increase is wrong – social, political, economic. Low earners are particularly hard hit by inflation. Rising prices for food, energy and housing are hitting the lower quarter harder than the middle and upper classes, despite the help from the federal government. They have savings for emergencies – and the poorer are forced to spend a much larger proportion of their income on those basic things that have become particularly expensive. It is therefore a matter of social reason to take this into account and not, as employers and the head of the minimum wage commission have done, to withdraw to the literal order and extrapolate the (modest) wage increases of the past. Economically, the 41 cents are wrong because demand can currently use stimuli. Anyone who earns minimum wage spends it immediately – and doesn’t put anything on the high edge.

And these 41 cents are also politically wrong. They say: It doesn’t depend on you down there. Chancellor Scholz had promised respect with the 12 euro minimum wage. Was that promise just a one-time gesture? That too is far too little.