[Wirtschaft] Treibt der Mindestlohn die Inflation
Addendum 2025-06-24:
The percentage figures have been corrected.
According to a survey by the German Trade Union Confederation (DGB/Deutscher Gewerkschaftsbund) a majority of the population wants an increase in the minimum wage but the Federal Council voted against it in 2024. There are good reasons, theoretical arguments and empirical evidence for a higher minimum wage.
According to a survey by the German Trade Union Confederation (DGB/Deutscher Gewerkschaftsbund) a majority of the population wants an increase in the minimum wage to 15 euros per hour. This is also relevant because there are theoretical arguments and empirical evidence for a higher minimum wage. [2]
A minimum wage is necessary as low-wage earners cannot commute to a country with low living costs outside of working hours. And wages must always increase by the inflation rate and productivity growth (golden wage rule), because otherwise there will be no demand for the additional value created in goods and services. Wages are not only the largest cost for companies but also the largest source of income for other companies. This development must appy in the long term in all workstations even those without productivity growth individual jobs will stay vacant otherwise.
However there is no fundamental right to exist for companies that compensate for uncompetitive meaning lower productivity with lower wages. High wages on the other hand are a driver of productivity. Because the lower the wages the lower the incentive to acquire modern equipment and machinery.
Since the introduction of the minimum wage in Germany it has increased from 8.5 (2015) to 12.41 (2024) euros per hour which is an increase of 46%. The average wage in Germany has increased from 43.39 (2015) to 57.17 (2024) euros per hour over the same period which is an increase of 35%. The minimum wage however increased by less than the average wage until 2022-23. [1, ZCPIN] [1, UVNT] [1, NLHT]
[1, ZCPIN] [1, UVNT] [1, NLHT]Since the introduction of the euro and until the introduction of the minimum wage the consumer price index rose from 100% to 126% (199-2014) or 1.74% per year. Since the introduction of the minimum wage and until the price shock caused by the pandemic and the sanctions the consumer price index rose to 105% (2015-2019) or 1.06% per year. Consequently the minimum wage was not followed by a noticeable increase in the inflation rate.
[1, ZCPIN] [1, UVNT] [1, NLHT] [1, ZCPIN] [1, UVNT] [1, NLHT]This dynamic makes perfect sense. The higher the income bracket the smaller the impact of an increase in the minimum wage. However price increases beyond nominal wage increases reduce demand. Suppliers therefore have an incentive to keep prices as low as possible in order to retain demand from those income brackets that do not benefit from an increase in the minimum wage. This pressure to maintain demand even with an increase in the minimum wage and the competition with other suppliers keep the price level low even during an increase in the minimum wage. [3]
Src:[1] AMECO database
https://economy-finance.ec.europa.eu/economic-research-and-databases/economic-databases/ameco-database_en
[2] Breite Unterstützung für 15-Euro-Mindestlohn: Zwei Drittel der Deutschen dafür 2025-06-05
https://www.dgb.de/presse/pressemitteilungen/agenturzitat/breite-unterstuetzung-fuer-15-euro-mindestlohn-zwei-drittel-der-deutschen-dafuer/
[3] Bundestag stimmt gegen Erhöhung des Mindestlohns 2024-04-25
https://www.bundestag.de/dokumente/textarchiv/2024/kw17-de-mindestlohn-999786
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