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> one of the two countries out of 27 European countries not having minimum wage laws [...] zero job loss could be observed Even before minimum wages, Germany h

> one of the two countries out of 27 European countries not having minimum wage laws [...] zero job loss could be observed Even before minimum wages, Germany has very high sector-level minimum wage due to union tarrifs that are binding for non-union employees. Job losses were negligible because the number of people that have been affected by the minimum wage was rather small. > the lower 60% of the population only hold 3% of the wealth. Germany has state pensions that you can live on comfortably, and renter-friendly housing laws. So people don't need to own a house as a retirement plan (unlike much of the rest of the world).

bildung 7y ago
> Even before minimum wages, Germany has very high sector-level minimum wage due to union tarrifs that are binding for non-union employees. True! Those were for the "high-paying" low wage jobs, though - mostly in construction. Gastronomy, hotel industry, haircutters etc. didn't have those. Wage laws in construction mosty were already at more than 9€/h before country-wide minimum wages were implemented. I can't really agree on that being the reason for no observed loss of jobs though - there are too many other examples of successful minimum wage laws in other regions where the feared job losses failed to materialize, too [1]. >> the lower 60% of the population only hold 3% of the wealth. > Germany has state pensions that you can live on comfortably, and renter-friendly housing laws. So people don't need to own a house as a retirement plan (unlike much of the rest of the world). Yes, my angle was a bit different, though: As middle class and upper class earn more, they can afford to save more. Saving, though, does mean that the money saved doesn't take part in the economy anymore (or at least to a lesser degree). If a low-wage person gets lets say 100€ more per month, that money will get spent almost completely at places like groceries, haircutters etc. - places that also have relatively low wages, which means those people will also spend the money completely and so on. A rise in minimum wages gets you the most bang for the buck, if your goal is stimulation of domestic demand. [1] As one example New Jersey in the US: https://www.nytimes.com/2015/07/17/opinion/paul-krugman-liberals-and-wages.html https://www.nytimes.com/2015/07/17/opinion/paul-krugman-libe...

bildung 7y ago

> Even before minimum wages, Germany has very high sector-level minimum wage due to union tarrifs that are binding for non-union employees. True! Those were for the "high-paying" low wage jobs, though - mostly in construction. Gastronomy, hotel industry, haircutters etc. didn't have those. Wage laws in construction mosty were already at more than 9€/h before country-wide minimum wages were implemented. I can't really agree on that being the reason for no observed loss of jobs though - there are too many other examples of successful minimum wage laws in other regions where the feared job losses failed to materialize, too [1]. >> the lower 60% of the population only hold 3% of the wealth. > Germany has state pensions that you can live on comfortably, and renter-friendly housing laws. So people don't need to own a house as a retirement plan (unlike much of the rest of the world). Yes, my angle was a bit different, though: As middle class and upper class earn more, they can afford to save more. Saving, though, does mean that the money saved doesn't take part in the economy anymore (or at least to a lesser degree). If a low-wage person gets lets say 100€ more per month, that money will get spent almost completely at places like groceries, haircutters etc. - places that also have relatively low wages, which means those people will also spend the money completely and so on. A rise in minimum wages gets you the most bang for the buck, if your goal is stimulation of domestic demand. [1] As one example New Jersey in the US: https://www.nytimes.com/2015/07/17/opinion/paul-krugman-liberals-and-wages.html https://www.nytimes.com/2015/07/17/opinion/paul-krugman-libe...