Friday, May 18. 2007
Posted by Joerg Wolf in
International Economics, Transatlantic Relations on Friday, May 18. 2007
"Unlike the US and many other EU countries, Germany has no statutory minimum wage, and debate has reignited over introducing one. One side says it's about social justice; the other calls it a job killer," writes DW World: Traditionally, wages in Germany are set according to industry-wide collective bargaining agreements and detailed rules determine what kind of work receives what kind of pay. Because of the strength of trade unions in Germany, wage settlements were generally pretty favorable to workers. While the American minimum wage, which dates from 1938, was put in place to keep employers from exploiting workers and giving them an income on which they could survive, Germany's generous social welfare system provided that protection. No one would work for wages that were under a certain level, because welfare benefits could give them a basic income. "That has acted as a kind of virtual minimum wage," said Joachim Ragnatz, an economist at the Halle Institute for Economic Research. But more and more holes have developed in that system. Welfare benefits have been cut back. Unions have lost clout and some sectors, especially in the service industry, have opted out of collective bargaining agreements. (...) A study just released by Ragnatz and Marcel Thum from the Ifo Institute for Economic Research says increasing the minimum wage to 6.50 euros per hour, as the Social Democrats have called for, would result in a loss of around 465,000 jobs. Raising it to 7.50 euros would kill around 621,000 jobs, according to the report. The governing Christian Democrats and Social Democrats were unable to reach a compromise on a minimum wage this week.
Related story on poverty: The Washington Post writes about four members of Congress, who have pledged to live for one week on $21 worth of food, the amount the average food stamp recipient receives in federal assistance. That's $3 a day or $1 a meal. They started yesterday: McGovern and Emerson have introduced legislation that would add $4 billion to the annual federal food stamp budget, which was $33 billion last year and covered 26 million Americans. (...) "We're trying to get this debate going," McGovern said. "There are more working people today getting food stamps than six years ago... There's not a member of Congress that doesn't have hunger in their district." According to the rules of the challenge, the four House members cannot eat anything beside their $21 worth of groceries. That means no food at the many receptions, dinners and fundraisers that fill a lawmaker's week. Both lawmakers keep blogs about the experience, McGovern at Food Stamp Challenge and Ryan on his House website. The above mentioned Washington Post article "Lawmakers Find $21 a Week Doesn't Buy a Lot of Groceries" is currently the most popular story on Technorati, which indicates the huge interest.
|
You know how the "intellectual" elite keep wanting the US to be more like those members of the EU? Atlantic Monthly points out that Germany has no minimum wage.... Comments ()
Tracked: May 18, 14:53