The price of a non existant minimum wage.

[Something completely different]

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

[bladevalant546]

German,

I am wondering are trying to present this to the American Economic Paradigm and how it can apply to it?

[Autumnlicious]

Perhaps there is no "One True" economic implementation and that compromises sooner or later break down.

A better question is, is there a better, efficient model that can be more fair?

Who can help implement it?

How flexible would a different model be if there were to be an economic downturn?

[Minimalist]

Over here the minimum wage has not kept up with inflation and the result is that the "working poor" end up being subsidized by various welfare programs.

Of course, the corporate criminal whores now shriek loudly to slash those programs so they don't have to pay taxes to support the people they are already exploiting by paying them shit wages while they buy their second or third yachts.

[bladevalant546]

Over here the minimum wage has not kept up with inflation and the result is that the "working poor" end up being subsidized by various welfare programs.

Of course, the corporate criminal whores now shriek loudly to slash those programs so they don't have to pay taxes to support the people they are already exploiting by paying them shit wages while they buy their second or third yachts.

That was the point of me asking said question. Comparing the economic culture of Germany to the economic culture of America. If minimum wage was scrapped it would only result in worsening worker exploitation. I feel the greater issue is to resolve the corporatist empire they have built.

[Something completely different]

German,

I am wondering are trying to present this to the American Economic Paradigm and how it can apply to it?

Nope.

I have had many debates with friends over this unique economic model. And I have personaly anticipated the release of this study and wanted to see what results this model provided without making any judgements before the facts are known.
And I know how much the liberterians (at least in our country) love to talk about how good it is..... or rather should have been.

Now that there is a study which examines the effects of such a system I hink it was worth posting.
I will also keep an eye open to see if there will be an english translation published soon.

Over here the minimum wage has not kept up with inflation and the result is that the "working poor" end up being subsidized by various welfare programs.

The average "minor wage" in Germany is at about 9.45 euros an hour (which is more than the legal minimum wage in alot of other European countries). Which is just enought to not depend on welfare, when you keep in mind that living standards are also higher than in alot of other European countries (depending on where you live (it would not be enought in Hamburg and Munich)).
It is actualy illegal to pay employees a wage on which they still have to depend on welfae benefits here - and you would be considered to be a parasite and the legal consequences would be pritty damning for your buisness and yourself. But I think there are exceptions for small buisnesses - not that they are allowed to keep employees on such a poor wage, I think they can apply for a low interest loan given by the goverment to pay proper wages, whilest the buisness can build itself up.

Perhaps there is no "One True" economic implementation and that compromises sooner or later break down.

A better question is, is there a better, efficient model that can be more fair?

Who can help implement it?

How flexible would a different model be if there were to be an economic downturn?

My guess is that there is no such thing as a "perfect model" which can run a economy. To me that is utopian thinking which I as a democrat firmly reject.

I actualy can see the benefits of such a system especialy during times of crisis, but it is not a long term system since it does not help in creating wealth.

It should be implemented in times of crisis (unless other systems are found to be more efficiant). But at the end of a crisis a minimum wage should be reimplemented to ensure that there is no exploitation.

[bladevalant546]

Oh okay in that case it is an interesting model. Actually I discussed with a friend and I think there is good logic behind eliminating a law enforced minium wage. It would enable companies to pay less of people who lets say only lick stamps, while they can pay someone else more because they have more responsiblity. Sadly this system will only allow for more exploitive avenues for the greedy rich here in America.

[Something completely different]

Oh okay in that case it is an interesting model. Actually I discussed with a friend and I think there is good logic behind eliminating a law enforced minium wage. It would enable companies to pay less of people who lets say only lick stamps, while they can pay someone else more because they have more responsiblity. Sadly this system will only allow for more exploitive avenues for the greedy rich here in America.

If it is used in a short term and only to be used by buisnesses in trouble and small buisnesses - I think it would bring crisis ereas back into working.


But I am pritty sure that if such a bill would be passed through your congress, various lobby groups would make it apply to even well working buisnesses and it would be seen as a long term thing.

[CleanShavenJesus]

The average "minor wage" in Germany is at about 9.45 euros an hour (which is more than the legal minimum wage in alot of other European countries). Which is just enought to not depend on welfare, when you keep in mind that living standards are also higher than in alot of other European countries (depending on where you live (it would not be enought in Hamburg and Munich)).
It is actualy illegal to pay employees a wage on which they still have to depend on welfae benefits here - and you would be considered to be a parasite and the legal consequences would be pritty damning for your buisness and yourself. But I think there are exceptions for small buisnesses - not that they are allowed to keep employees on such a poor wage, I think they can apply for a low interest loan given by the goverment to pay proper wages, whilest the buisness can build itself up.

That's a nice model. The legal minimum wage in the United States is currently $7.25 (or 5.48 euros) an hour. And the highest wage an average worker for a big business can earn, that I can see, is $7.40 an hour at McDonald's.

You cannot live on this money. It is not possible. There are currently strikes on fast food joints to pay higher, but instead McDonald's insulted their workers with a "Spending Journal" to help their employees live on the wages they are given. This "spending journal" requires that the employee does not pay for any heating, and works a second job. It also assumes that your health insurance is only $20, among other ridiculous assumptions. It's pathetic. It was supposed to be evidence that a person can work on the minimum wage, but if anything, it showed that you can't.

Work is very limited in many parts of the US. When I was younger only kids worked at McDonald's, as summer jobs. That was the fast food work force. Now it's very common to see 30-year olds, 40-year olds, even 50-year olds taking your order at McDonald's. And these adults need to survive on what they have. and what they have isn't enough to survive.

[bladevalant546]

Oh okay in that case it is an interesting model. Actually I discussed with a friend and I think there is good logic behind eliminating a law enforced minium wage. It would enable companies to pay less of people who lets say only lick stamps, while they can pay someone else more because they have more responsiblity. Sadly this system will only allow for more exploitive avenues for the greedy rich here in America.

If it is used in a short term and only to be used by buisnesses in trouble and small buisnesses - I think it would bring crisis ereas back into working.


But I am pritty sure that if such a bill would be passed through your congress, various lobby groups would make it apply to even well working buisnesses and it would be seen as a long term thing.

If it was passed here with way our big business run their business. It was be 1880s-1900s all over again. Sadly the wrong people have the power at the moment. I think for small business this would benefit them as they can pay according to task ( if it fair and reasonable) rather than a arbitrary wage.