The Minimum Wage: An Effective Means to Regain the Electorate's Confidence?

The introduction of the national minimum wage in Germany in 2015 is an important yet controversial instrument of labour market policy. This paper represents an attempt to define the scope of influence it has on companies and employees in respective branches of economy (accommodation and food services business, retail trade, manufacture of food products, transportation and warehouse management). In order to accomplish it the method of analysis and criticism of literature has been applied. It allowed to conduct an evaluation of the discussed dependence.The preliminary findings indicate that interference is especially high in the low wages sector. To show the consequences the national minimum wage has on the job market, positive changes in employment and unemployment levels in the given period (the increase in the first and the drop in the second one) were presented. This meant that the fears concerning a few thousand job losses, as a result of introducing the minimum wage, were unjustified. In this paper articles and analyses published by German research institutes were used. The statistical data comes from the databases of these institutes and of the Federal Employment Agency. The research period considers the years 2014-2015, specifically one year before and half a year after the introduction of the minimum wage in Germany with the aim of highlighting the changes in the employment size caused by the minimum wage.

The Association Between State Minimum Wage and Firearm Homicides, 2000–2020

In January 2015, Germany introduced a federal, statutory minimum wage of 8.50 € per hour. This study evaluates the effects of this policy on regular and marginal employment and on welfare dependency. Based on county-level administrative data, this study uses the difference-in-differences technique, exploiting regional variation in the bite of the minimum wage, i.e. the county-specific share of employees paid less than 8.50 € before the introduction of the minimum wage. The minimum wage had a considerable negative effect on marginal employment. There is also some indication that regular employment was slightly reduced. Concerning welfare dependency, the minimum wage reduced the number of working welfare recipients, with some indication that about one half of them left welfare receipt due to the minimum wage.

Assessing the main and spillover effects of Seattle's minimum wage on establishment decisions

Minimum Wages and Spatial Equilibrium: Theory and Evidence

Would a Legal Minimum Wage Reduce Poverty? A Microsimulation Study for Germany

Minimum Wages and Competition: The Case of the German Roofing Sector

Cities are increasingly setting their own minimum wages, and this trend has accelerated sharply in recent years. While in 2010 there were only three cities with their own minimum wages exceeding the state or federal standard, by 2020 there were 42. This new phenomenon raises the question: is it desirable to have city-level variation in minimum wage polices? We discuss the main trade-offs emerging from local variation in minimum wage polices and evaluate their empirical relevance. First, we document what type of cities raise minimum wages and we discuss how these characteristics can potentially impact the effectiveness of city-level minimum wage policies. Second, we summarize the evolving evidence on city-level minimum wage changes and provide some new evidence of our own. Early evidence suggests that the impact of the policy on wages and employment to date has been broadly similar to the evidence on state and federal-level minimum wage changes. Overall, city-level minimum wages seem to be able to tailor the policy to local economic environment without imposing substantial distortions in allocation of labor and businesses across locations.

This paper evaluates the short-run impact of the introduction of a statutory minimum wage in Germany on the hourly wages and monthly earnings of workers targeted by the reform. We first provide detailed descriptive evidence of changes to the wage structure in particular at the bottom of the distribution and distinguish between trends for regularly employed and marginally employed workers. In the causal analysis, we then employ a differential trend adjusted difference-in-differences (DTADD) strategy to identify the extent to which these changes in wages and earnings can be attributed to the minimum wage introduction. We find that the minimum wage introduction can account for hourly wage growth in the order of roughly 6.5 % or€\euro0.45/hour and an increase in monthly earnings of 6.6 % or€\euro53/month. Despite finding wage growth at the bottom of the distribution, the paper documents widespread non-compliance with the mandated wage floor of€\euro8.50/hour.

The authors identify winners and losers in Slovenia's economic transition by tracing changes in returns to education, experience, and gender and changes in wage inequality from 1987 to 1991. They find the following. Relative wages and employment rose for the most educated and fell for the least educated, in all industries. Relative wages and employment rose with years of work experience until pensionable age. At pensionable age, relative wages increased very rapidly and relative employment was greatly reduced. Using pension policies to encourage early retirement drastically reduced the supply of very experienced workers. Either the policy caused firms to bid up wages for workers of pensionable age to keep them from retiring, or it caused a selection process in which only the highest-paid workers remained in the workforce. Regardless, the pension policy has proved to be costly, and early retirements did not make room for the youngest workers but for those just under pensionable age. Women gained relative to men in both wages and employment primarily because they occupy education and industry groups less adversely affected by the transition, not because of economywide reductions in discrimination against women. Increasing returns to education and experience contributed to wage inequality, but the variance in wages also increased for individuals with identical skills. Big changes in relative wages should signal future reallocation of labor toward more productive, higher-paying sectors. Setting minimum wages, fixing ranges of pay, and indexing wages to inflation did not prevent increases in wage variation from occuring. Wage minimums did not appear to have an effect, presumably because inflation reduced real minimum wages so quickly that most workers were paid above the minimums. In Slovenia, policy changes are reflected in labor market outcomes. Disabling the tax-transfer policy from relatively profitable to relatively unprofitable firms and eliminating worker referendums on wage scales removed mechanisms that tended to compress wage variation. Greater demand for skilled workers also reflected both the economywide need to cope with uncertainty and such industry-specific factors as reduced labor demand, especially in less skill-intensive industries. The results in Slovenia contrast sharply with those in eastern Germany. Eastern German workers have had decreasing returns to education and experience. But it is not clear how relevant the eastern German experience is to other transitional economies because of western Germany's efforts to alleviate problems. More similar to the authors' findings are the results of Flanagan (1993) on the Czech Republic, which show increasing returns to education but decreasing returns to experience. In some respects, Slovenia is atypical because it is richer and more western in orientation than other transitional economies. However, economies could learn from the experience in Slovenia because Slovenia also had social ownership, full employment coupled with substantial hidden unemployment, and an egalitarian wage structure. And Slovenia has introduced labor market reform and experienced social dislocations similar to those in other transitional European economies.

The Short-Run Employment Effects of the German Minimum Wage Reform

The imposition of a national wage standard sets up a useful natural experiment in which the treatment varies across states depending on the fraction of workers earning less than the new minimum. I use this idea to evaluate the effect of the April 1990 increase in the Federal minimum wage on teenage wages, employment, and school enrollment. Interstate variation in teenage wages was high at the end of the 1980s, in part because 16 states had enacted state-specific minimums above the prevailing Federal rate. Comparisons of grouped and individual state data confirm that the rise in the minimum wage significantly increased teenage wages. There is no evidence of corresponding losses in teenage employment, or changes in teenage school enrollment.

Neoclassical labor market theories imply that employers will react to binding minimum wages by changing the level of employment. A multitude of studies consider this aspect of minimum wages, yet fail to reach a consensus as to its employment effects. While the employment effects of the minimum wage are certainly important, the empirical literature has not adequately explored the possibility that employers may also adjust non-wage components of the job such as fringe benefits, job safety, and access to training opportunities. We study the effect of minimum wage legislation on fringe benefits (employer provision of health insurance, pension coverage, dental insurance, vacation pay, and training/educational benefits) and working conditions (shift work, irregular shifts, and workplace safety) during the period 1979 to 2000 using the National Longitudinal Survey of Youth and the Current Population Survey. We examine effects of state and federal variation in the minimum wages on groups likely to be affected by the minimum wage. These effects are compared to estimates found for groups unlikely to be affected by minimum wages. Our results indicate no discernible effect of the minimum wage on fringe benefit generosity for low-skilled workers. This

Growing consumption of increasingly less expensive and especially fast food, has been cited as a potential cause of increasing rate of obesity in the United States over the past several decades. Because the real minimum wage in the United States has declined by as much as half over 1968-2007 and because minimum wage labor is a major contributor to the cost of food away from home we hypothesized that changes in the minimum wage would be associated with changes in bodyweight over this period. To examine this, we use data from the Behavioral Risk Factor Surveillance System from 1984-2006 to test whether variation in the real minimum wage was associated with changes in body mass index (BMI). We also examine whether this association varied by gender, education and income, and used quantile regression to test whether the association varied over the BMI distribution. We also estimate the fraction of the increase in BMI since 1970 attributable to minimum wage declines. We find that a $1 decrease in the real minimum wage was associated with a 0.06 increase in BMI. This relationship was significant across gender and income groups and largest among the highest percentiles of the BMI distribution. Real minimum wage decreases can explain 10% of the change in BMI since 1970. We conclude that the declining real minimum wage rates has contributed to the increasing rate of overweight and obesity in the United States. Studies to clarify the mechanism by which minimum wages may affect obesity might help determine appropriate policy responses.

Does Minimum Wage Affect Workplace Safety?