German Employment and the Minimum Wage
Many European countries suffered from what they considered unfair
competition from Germany in terms of labour costs. Germany, the richest
country in Europe, had no national minimum salary, and was hence able
to employ workers, especially immigrants from Eastern Europe and
Turkey, at wages that could be as low as 1/3rd of a French minimum
salary.
The Hartz reforms, launched under Gerhard Schroeder, that started in 2002 drove wages / salaries and hence labour costs down.
Gerhard Schröder: "The cost of labour has become unsupportable ( ) and
stops employers creating jobs... We have to cut back state expenditure, encourage individual
responsibility, and demand more effort from everyone" (Bundestag, 4 March 2003)
Under pressure from Europe, Germany finally introduced a minimum
salary in 2015. German economists said that a million jobs would be
destroyed by introducing a minimum salary. Five years later, Germany
found that it had not lost a million jobs, but that it had created 3
million! A government commission is trying to understand why 'classical
economic theory' didn't work. (Handelsblatt, 17 January)
See 'Germany's Labor Market - the Debate over the Minimum Wage' (DW 4m)
Migrant workers exploited in German meat industry (France 24 in English. 5m)
Minimum wage comparison in Europe. (Eurostat)