Lack of German Regulations, Part 1

Germany has no shortage of regulations, useful and otherwise. But one thing that it does not have at the moment is a legally mandated national minimum wage. The United States, supposed home of neoliberal puritanism and other horrible things, has had one since 1938.

The stated reason within the German debate is that such a law would interfere in the autonomy of groups bargaining on wages and conditions. Indeed it would, and this is a feature not a bug. But the autonomy has clearly been that of groups, not of individual people. If you weren’t part of a group, you were out of luck.

The SPD and the larger unions are now moving into the late 20th century and pushing for a statutory minimum wage. Employer groups and the conservative parties, true to form, are resisting. I think it is long past time for a minimum wage, and buying an illusory autonomy at the cost of non-unionized workers has not been a good position for the German left to hold. My disposition fits very poorly with corporatism, and I am glad to see that it is being pushed back in this aspect as well.

It isn’t often that German life is under-regulated, but this one will do the country good.

This entry was posted in A Fistful Of Euros, Economics and demography by Doug Merrill. Bookmark the permalink.

About Doug Merrill

Freelance journalist based in Tbilisi, following stints in Atlanta, Budapest, Munich, Warsaw and Washington. Worked for a German think tank, discovered it was incompatible with repaying US student loans. Spent two years in financial markets. Bicycled from Vilnius to Tallinn. Climbed highest mountains in two Alpine countries (the easy ones, though). American center-left, with strong yellow dog tendencies. Arrived in the Caucasus two weeks before its latest war.

4 thoughts on “Lack of German Regulations, Part 1

  1. “But the autonomy has clearly been that of groups, not of individual people. If you weren’t part of a group, you were out of luck.”

    Is it viable in Germany for an employee to negotiate with his employer on his own (assuming the potential employee has some negotiating power, e.g. is a highly trained professional)? Or are standardized, union-negotiated contracts basically the only option?

  2. For many types of professional, negotiating individually is the only way there is. This has its downsides, too, but we are generally talking about people well above minimum-wage territory.

  3. According to the traditional leftist view there should be no ununionised workers.

    Secondly, there is no such thing as a job that pays more than it produces. So if you impose a minimum wage some will fare better and some will become jobless.

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