Concrete web-magazine

27Sep/130

The Minimum is a Wage

Following the recent elections in Germany, the parliament is now made up entirely of parties which have voiced their support for the introduction of a legal minimum wage in some shape or another. The last bastion of vocal opposition to this demand that had initially been introduced to the public by the ex-communist Left Party a few years ago, the Free Democracts, have failed to win the necessary amount of votes to cross the 5% threshold barring minor parties from access to the German parliament.

But if I were asked to make a prediction, I would state with great certainty that this measure, which numerous capitalist countries seemingly have no problem with, will not be introduced to Germany. A general, legally binding minimum wage for all jobs within Germany is too much of a contradiction to German economic policy.

Within Berlins political strate, many seem to have realized throughout the last years that the campaigning for a minimum wage not only joined the Left Party and the Labor Unions together in one front - in a Republic where all parties have categorically ruled out a coalition with said party under any circumstances - but also earned them popularity with the general public.

This is not surprising, considering that Germans have suffered from an overall negative trend in terms of income. Over the last decade, Labor Unions have generally failed to negotiate wage raises that even just meet the inflation rates, leaving even those with secure jobs with de facto less money to spend. And this does not account for those who found their full-time, insurance covered jobs replaced with so called "mini-jobs", contracts that allow for a maximum income of 450 Euro per month and are not covered by social insurance - which saves employers a fair share of their profits.

The restructuring of unemployment benefits in the Federal Republic has enacted further pressure on the working classes, as unemployed Germans now find themselves in an almost surreal machinery geared towards forcing them to accept any kind of job, no matter the conditions. Germany's "Agency for Work" is quick to hand out punishments and cut payments to anyone not meeting application quotas, refusing to accept work offered to them or offend their beuraucrats in any other kind of way. Combined with a omnipresent "any kind of work is better than no work"-ideology, this has massively eroded the function of unemployment benefits as lower limit for wages. It's not an option in Germany to rather be unemployed than to work for a wage that is insufficient in covering your expenses.

A minimum wage is appealing under such circumstances. Indeed, it is an almost revolutionary idea, considering that Germany's entire export-oriented economy rests soundly on the fact that it has managed to keep its labor unions in check, maximize pressure on the unemployed a create a de facto negative trend for its wages, while the rest of the Eurozone did not. Germany is the manufacturing center of Europe, its industry geared towards exports and neglecting the domestic markets in order to achieve as positive a trade bilance as possible. This had devastating effects on the remainder of Europe once the economic crisis hit, but it has stabilized the German economy, at least for now.

But this is also the reason one should doubt the willingness of anyone outside the Left Party to really introduce a legal minimum wage, no matter their public statements. The ruling Christian Democrats are the party of the austerity-regime, the Social-Democrats and the Green were in a coalition when the groundworks for Germanys current economic modus operandi were laid, when unemployment benefits were cut and the force-to-work policies known as "Hartz 4" were enacted.

If there were any sincere intention to introduce minimum wages, we would have already seen them become reality. In fact, whenever such a measure was introduced to parliament in the recent years, minor difference about its height or its implemention were cited to turn it down. The debates are ludicrous and often just revolve about measly fifty cent differences. But these debates are also a strategy to postpone the implemention of a legal lower limit to wage cuts as long as possible, without raising the ire of the German public, as admittedly harmless as this ire usually manifests.

We may soon see the rest of Europe try to challenge Germany's low wages with cuts of their own. When that happens, Germany will probably turn the downward spiral on the labor market they started even further. Without a minimum wage, it is well prepared to do so.

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