Unfair minimum wage?
Uniform salary meets regional differences
Created: 11/17/2022, 5:30 p.m
Regional price differences in different regions of the country.
But the statutory minimum wage is the same – 12 euros.
Is a flat wage fair?
The statutory minimum wage has been set at a uniform nationwide level since it was introduced in 2015.
Currently, that is 12 euros, which employees receive at least per hour.
Regardless of whether you work in Berlin or Munich.
However, there are sometimes considerable differences between the regions in Germany that affect the financing of everyday life.
Researchers at the Institute for Labor Market and Vocational Research (IAB) consider a regional adjustment of the minimum wage to be conceivable, but the advantages and disadvantages would have to be weighed up.
Minimum wage: Price levels in rural and urban regions vary greatly
The statutory minimum wage in Germany is 12 euros – nationwide.
A regionally different minimum wage could have advantages for employees.
© Andreas Poertner/Imago
With the uniform statutory minimum wage, there are differences in general purchasing power within Germany.
The researchers Wolfgang Dauth and Andreas Mense from the IAB give the following example in their analysis:
Single person, full-time employment
Receives 12 euros legal minimum wage
Gets about 2,088 euros (gross)
About 1,500 euros (net) remain after deductions
The fixed costs then have to be paid with the approximately 1,500 euros that the person has left.
It makes a difference where you live.
Because the costs for rent and other services are higher in cities like Munich than in rural regions.
The researchers make it clear that these regional price differences are also reflected in the level of salaries.
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What is the impact of the increased minimum wage?
"How much the standard of living increases as a result of a minimum wage-related wage increase depends primarily on the regional price level," the researchers explain in the analysis.
Negative effects are conceivable above all in regions with a low price level, where employee productivity is lower.
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Pros and cons of regional differences in the statutory minimum wage
✔️ Equality of people who include minimum wage in terms of purchasing power.
✔️ Better off for people living in more expensive regions.
❌ The control effort for regional differences is high.
Non-stationary industries in particular require more control.
❌ Companies may relocate because they expect benefits from this.
❌ Argument of injustice based on place of residence.
Those responsible assume that regions in the old federal states in particular will benefit from a regionally dependent minimum wage.
