Die Linke attacks minimum wage age limit
German Labour Minister Andrea Nahles tabled a draft law last week introducing a minimum wage of €8.50 per hour. But opposition leaders from the Left Party (Die Linke) have already announced legal action against the proposed legislation. EurActiv Germany reports.
“We will take every age-limit to court, no matter whether it is 18, 21 or 25”, Die Linke chairman Bernd Riexinger told the Neue Osnabrücker Zeitung, reacting to the draft proposal for a minimum wage in Germany that will become effective on 1 January, 2015.
“Age-limits are unconstitutional,” Riexinger emphasised.
Last week, Labour Minister Andrea Nahles tabled a draft proposal which would introduce a blanket minimum wage of €8.50 starting at 18 years of age, covering both eastern and western Germany, phasing out sector-specific exceptions by 2016.
“The minimum wage comes as discussed in the coalition agreement,” said Nahles, who hails from Germany’s Social Democratic Party (SPD).
The age-limit is only one of many points of debate, sparked by the proposal for a minimum wage in Germany. While Die Linke is calling for an elimination of the restriction, politicians from Merkel’s Christian Democratic Union (CDU) and the economic sector are hoping to raise the age-limit to 21 or 25.
“18 is the wrong age-limit”, CDU deputy chairman Julia Klöckner told German news agency dpa. “The age-limit should be higher. Actually, completed training should be the criterion.”
Age-limit to safeguard vocational programmes
Klöckner’s view is mirrored by those who see an age-limit as a way to preserve the attractiveness of vocational training. Without this restriction, young people might be tempted to take on a job at minimum wage rather than an apprenticeship, which are often subject to low pay, or none at all.
“We must prevent young people from favouring a better paying temporary job instead of starting an apprenticeship,” Labour Minister Nahles said, emphasising the importance of the 18-year limit.
Alongside countries like Denmark, Austria and the Netherlands, Germany is often praised for the effectiveness of its vocational training model as a means of tackling youth unemployment. But opposition politicians from Die Linke argue an age-limit as the wrong solution.
“Nahles is right,“ said the party’s youth policy spokesman Felix Pithan. "Many trainee allowances are too low. But weakening the minimum wage is not the solution to this. Instead, there should be appropriate remuneration for trainees.”
€8.50 minimum wage endangers 900,000 jobs
A wage floor of €8.50 is expected to affect around 5 million workers in Germany: roughly 14% of the total work force, and as many as 20.4% in eastern Germany.
But according to a study released by the Ifo Institute last week, the measure would endanger up to 900,000 as it stands now. “Workers who are currently topping up their income are hit particularly hard,” Ifo research professor Ronnie Schöb said in the study’s press release.
The Ifo report estimates that 660,000 marginal employment positions would be lost due to the minimum wage, affecting young people and pensioners in particular. In the full-time sector, the €8.50 wage limit would knock-out an estimated 340,000 jobs, according to the study.
Switzerland to vote on universal income
Despite doubts about minimum income guarantees, similar initiatives have been spearheaded throughout Europe. A Swiss initiative the New York Times called “paying people for being alive” hopes for a referendum soon, over basic, unconditional income for all.
According to the universal income campaign, all Swiss citizens would be given a monthly check of around 2,500 Swiss Francs (€2,045) regardless of employment status.
Aside from the cost of the programme, sceptics question whether such a measure would actually benefit the country’s economy and society.
“There will be no incentive for young people to learn a job or study. It’s not only an economic question, it’s also a question of the human image,” said Swiss economist Rudolf Strahm, speaking to BBC.
In October 2013, campaigners collected over 120,000 signatures in favour of a referendum on introducing universal income in Switzerland. While this meets the 100,000 requirement to hold a vote, an official date has not been set.
Sweden, Denmark and Germany currently do not have a minimum wage in place. While Germany's grand coalition finally produced a draft agreement over introducing minimum wage, other EU member states have been calling for an EU-wide wage floor. French socialists, for example, believe Europe should be more uniform on labour policy and see the German measure as a step in the right direction.
The European labour market is confronted with a paradox: while there is record unemployment in many EU member states, millions of jobs remain unfilled in many sectors that are key to economic development.
Despite all efforts to bring down unemployment and match skills in the domestic labour force, Europe-based international companies and SMEs face huge problems hiring the people they need.