Since the nineties, the low-wage-sector in Germany has increased significantly. About 6.5 million employees cannot live on their incomes despite full-time-employment. Therefore, the government passed a resolution to introduce the minimum wage. From 1 January 2015 every worker (with a few minor exceptions) will get EUR 8.5 per hour. At first glance this measure seems reasonable to improve the income situation of many people. But the nationwide introduction of the minimum wage contains problematic aspects with regard to the labour market.

From the advocates’ point of view is the introduction of the minimum wage a necessary measure to guarantee a fair income. They rely on the successful implementation in 21 of 28 EU countries. Higher wages would lead to increase in purchasing power, which means a higher demand and thereby the creation of new jobs. They also see no risk of relocation of jobs to countries abroad. In the opinion of the proponents services to people and institutions would not be relocated. Furthermore, they argue that the competiveness will be maintained when all participants have to pay the same minimum wage of EUR 8.5.

The opponents of the minimum wage reject the introduction in 2015. Their main argument refers to increasing costs for companies which leads to a reduction of jobs. They afraid that some companies, especially small companies, are not able to pay EUR 8.5 per hour so that they are forced to cut jobs. Especially for low skilled workers the opportunity to find employment would be reduced. This in turn will raise the black labour markets.
The opponents also argue that a nationwide introduction of the minimum wage will create an enormous bureaucratic expenditure which means additional costs.

In my opinion the introduction of the minimum wage is economically futile. For me it is a logical conclusion that a minimum wage will reduce