Can you live on the minimum wage

Why the minimum wage is nowhere near sufficient - or is it?

The statutory minimum wage should actually protect workers in Germany from wage dumping and exploitation. But can a gross hourly wage of EUR 9.19 really do that? We present you the most important facts about the legal minimum wage, its advantages, but also show the great potential for further development of the current regulations.

Minimum wage - what does it actually mean?

When the German minimum wage was introduced in 2015, it was still EUR 8.50 gross. How did you get this amount? It was an average of 30 percent below the usual wages and therefore corresponded to so-called immorality before the law. After various initiatives and the resulting adjustments, the statutory minimum wage is now 9.19 euros gross and will be increased again to 9.35 euros from January 1st, 2020. Not too much when you consider that, of course, taxes and any insurance premiums are usually deducted from this. Attention: In an employment relationship that is subject to the Minimum Wage Act, the employer bears both statutory health and pension insurance. Your company is obliged to record your working hours and keep them for at least two years. Your boss must always disclose this data to you and make it available on request.

"Modern bondage at the minimum wage." - kununu employee evaluation at tempus

But is at least every German employee entitled to the minimum payment? No. First, you have to be 18 years old for the scheme to apply to you. You already suspected it - becoming of legal age is not enough as a prerequisite for the minimum wage. In addition, you have to be a German employee by definition. Sure, you are not if you are a volunteer, self-employed or do voluntary service. However, the demarcation is not always that easy. This means that you do not fall under the Minimum Wage Act if you are a trainee or take part in a job promotion measure. Interns only receive the statutory minimum salary if they have voluntarily worked for an employer for more than three months. Then there is the minimum wage from the first day of the internship. But it also means: Unfortunately, compulsory interns are not included and are legally allowed to receive less salary. Long-term unemployed are also subject to the special regulation that they do not have to be paid according to the minimum wage until six months after re-entering the labor market.

“Working for a minimum wage under constant stress.” - kununu employee evaluation at autoimage GmbH

The good news: employees from abroad or seasonal workers also have to be paid at least according to the minimum wage on the German labor market. For example, if you live in an Austrian border region and work in both Austria and Germany, your employer only has to pay you an hourly gross wage of at least 9.19 euros for your work in Germany. In Austria, he is generally allowed to adjust the hourly wage downwards.

According to the Federal Statistical Office, around two million people in Germany only receive the minimum wage as a salary.

The advantages of the minimum wage

The minimum wage naturally has various advantages for employees - and employers, but more on that below. First and foremost, the law is intended to counteract the poverty of workers in Germany so that they can live without state support. Since poverty is widespread and can also affect academically trained young professionals and interns, the regulation helps them too. Wage dumping, in which companies hire foreign employees underpaid and cut the domestic position, can at least be limited in theory.

Although the minimum wage is mainly of high relevance to employees, employers can also take advantage of it. You will get more motivated employees because they question the purpose of their job less and, thanks to fair treatment, usually act more committed. The state itself benefits from the Minimum Wage Act, among other things, because it aims to prevent illegal work and the associated tax evasion.

What development potential does the minimum wage have?

We have just introduced you to the various advantages of the minimum wage. Nevertheless, the law is far from being optimal for the employees concerned. Perceived and actual poverty is very much dependent on where you live. Someone who earns the minimum wage of 9.19 euros gross in Munich can hardly afford a sufficiently large apartment or support a family without government support. In the countryside or in cities with cheap housing, on the other hand, it is much easier to live with wages than without. Similarly, the individual living situation of the minimum wage earner is not taken into account. If someone is responsible for caring for relatives or is a single parent, their standard of living is likely to be very low despite the minimum wage. For these reasons, the minimum wage is always a topic of political discussion.

Wage dumping can theoretically be combated, but it results in a completely different problem. Companies are completely outsourcing their (production) locations abroad in order to escape financial constraints. What then is the potential for development? After all, you can't tell companies where to open their locations. Or? In a way, yes. State incentives encourage many companies to stay in Germany anyway. These should be further thought through and expanded in favor of the employees.

But that's not all that needs to be considered. Checking companies for compliance with the law is and remains problematic. Some workers remain silent about the violations for fear that they could be terminated and be left empty-handed. If you suspect that your employer is violating the applicable minimum wage law, you can report to the Federal Employment Agency or the financial control of undeclared work. You can do this even if it is not you but your colleagues who are affected. The complaint remains anonymous.