Not everybody drives a BMW in Germany

A study conducted by the University of Duisburg-Essen, cited by Deutsche-Welle indicates that the working poor in Germany increased by 2.3 million to 8 million people arriving in 2010, equivalent to 23.1% of the working population the country. The report was also cited in Süddeutsche Zeitung, noting that one of every 4 workers receive low wages, i.e. well below 9.15 euro per hour.

This percentage was slightly higher before the outbreak of the crisis (24.2% in 2007), which has allowed German authorities to diminish its importance. While unions fighting for the introduction of a minimum wage of 8.50 euro per hour, the study reports that 19.9% of employees are currently below this threshold and 11.4% earn less 6 euro per hour. Young people under 25 years of age are the most affected by low wages. These figures are astonishing the world since the rise of poverty in Europe's largest economy was not expected by anyone.

The study by the University of Duisburg-Essen does not say in which areas these workers work with little reward, but many of them are concentrated in trade and personal services. The chart below I have drawn from the OECD and also shows the fall in wages.

We must also factor in the importance of the so-called "mini-jobs". With this type of job contract, the worker earns less than 400 euro a month. However, if this worker is not previously insured, German laws require that the worker him/herself pays the compulsory medical insurance, costing up to 150 euro a moth, making it impossible for non-covered immigrant workers to have a regularized situation that deals both with the legal requirements and rent payments and living costs.


These "mini-jobs" were designed to promote a return to regular job contracts, but have become the way many employers have access to cheaper workers and without the constraints of a contract. Hence Angela Merkel is considering the idea of ​​a higher minimum wage, closer to 9 euro per hour. Unions  in the rest of Europe also expect a higher minimum wage in Germany, in order to improve the competitiveness of their countries. But the idea comes in bad times, as the coming contraction will lower exports and will induce a reduction in employment. This will render considering increasing wages impossible.