The IAB ( Instituts für Arbeitsmarkt- und Berufsforschung ) (Institute for labor and buisness studies) has a released a study on the developments in the German economy during the past years.
One of the major reasons why Germany is currently the biggest and most successfull economy in Europe is the the fact that there are no legal minimum wages. Wages here are determined by the employer and unions in a contract system.
This has lead to some great economic success in various ereas.
The car industry no longer gives long term employment contracts and relies on constantly regiving short term contracts with lower wages. The catering economy has also greatly benefited from the lack of minimum wages, especialy new buisnesses came into existance and could easily employ.
But - the study has revealed that 25% of all employed in the German economy work for a minor wage. The most shocking revalation of the study is that 80% of those who work for such a minor wage have a apprenticeship or professional education which would actualy qualify them to have bigger wages.
In conclusion one has to say that the lack of a minimum wage has boosted the economy in the catering sector by helping to create new buisnesses - but in the long term will only create good numbers in that sector on the basis of exploitation of employees.
In the manufactoring sector enormous profits have been made recently through the sale of products into the Asian market, but one has to say that those profits could have also been made with employing workers on a long term contract with higher wages, especialy when considering how big that sector is here - so one has to conclude that the manufacturing sector might have been saved through the non existing minimum wage during the last crisis - but today it is simply a tool used to exploit employees.
One has to say that those numbers make it look more and more as if the growing economy built with the help of low wages did not help in spreading wealth under the population of this country as some may have argued.
A few years ago, I thought of this as an economic model worth exporting into other European countries (especialy into Southern Europe). But today it seems to be a system which will not work in the long term and which would only be good to give an economy a short boost which creates employment but does not help in creating long term wealth.
links in German:
http://www.fmm-magazin.de/studie-niedrig...d7204.html
http://www.spiegel.de/wirtschaft/soziale...13074.html
One of the major reasons why Germany is currently the biggest and most successfull economy in Europe is the the fact that there are no legal minimum wages. Wages here are determined by the employer and unions in a contract system.
This has lead to some great economic success in various ereas.
The car industry no longer gives long term employment contracts and relies on constantly regiving short term contracts with lower wages. The catering economy has also greatly benefited from the lack of minimum wages, especialy new buisnesses came into existance and could easily employ.
But - the study has revealed that 25% of all employed in the German economy work for a minor wage. The most shocking revalation of the study is that 80% of those who work for such a minor wage have a apprenticeship or professional education which would actualy qualify them to have bigger wages.
In conclusion one has to say that the lack of a minimum wage has boosted the economy in the catering sector by helping to create new buisnesses - but in the long term will only create good numbers in that sector on the basis of exploitation of employees.
In the manufactoring sector enormous profits have been made recently through the sale of products into the Asian market, but one has to say that those profits could have also been made with employing workers on a long term contract with higher wages, especialy when considering how big that sector is here - so one has to conclude that the manufacturing sector might have been saved through the non existing minimum wage during the last crisis - but today it is simply a tool used to exploit employees.
One has to say that those numbers make it look more and more as if the growing economy built with the help of low wages did not help in spreading wealth under the population of this country as some may have argued.
A few years ago, I thought of this as an economic model worth exporting into other European countries (especialy into Southern Europe). But today it seems to be a system which will not work in the long term and which would only be good to give an economy a short boost which creates employment but does not help in creating long term wealth.
links in German:
http://www.fmm-magazin.de/studie-niedrig...d7204.html
http://www.spiegel.de/wirtschaft/soziale...13074.html
