Introduction and effects of the statutory minimum wage in Germany – A qualitative study commissioned by the German Socio-Economic Panel (SOEP)
On behalf of the Socio-Economic Panel at the German Institute for Economic Research, this qualitative study examined the effects directly related to the introduction of the minimum wage in Germany in 2015. For this purpose, a total of 31 people from the low-wage sector in 3 regions of Germany were surveyed in focus groups.
In principle, the majority of those surveyed see the introduction of the minimum wage as a suitable instrument for achieving greater social justice in German society. It is seen as “a first step in the right direction”, which signals a certain degree of appreciation to people in the low-wage sector. “Real” monetary effects are considered to be (still) too low.
The discussion participants named price increases, an increase in undeclared work, systematic prolongation of long-term unemployment and the closure of small businesses as negative effects.
In addition, practices by means of which employers attempted to undermine the minimum wage law often led to a deterioration in the situation of employees. Stricter controls and an increase in the financial and personnel resources of control bodies to combat the leverage practices described in more detail in the report were explicitly called for by the respondents.
Factual knowledge about the minimum wage law, future adjustment plans and exemptions is very fragmentary and vague in the target group studied. For a higher acceptance of the political measure “minimum wage” among the population, increased and focused communication seems absolutely necessary.
Link to the report: SOEP Survey Papers