German minimum wage is working, thank you

After much hoping, wailing, and warning, the world's 4th largest economy - Germany - introduced a minimum wage on January 1, 2015.
That's some four decades after the United States, some 65 years after France, and still 15 years after Britain.

While other nations began to debate the "living wage" question, #4 was stuck talking about any minimum at all.

Why it took so long is nobody's guess, the arguments are right there on the web for your to savor, except, of course, the unspeakable one. The one that goes I don't f****ing care if you earn 2 Euros an hour, it's your own fault if you have no skills and no drive.

To be fair to everybody, the argument does bubble up every now and then in heated debates about entitlement programs and the joys of greed according to Mr. Johnson.
Bringing it up in the discussion about minimum wage must have appeared so potentially toxic that nobody would venture any closer than "freedom of contract", "entry level positions", "easy extra income for retirees" or any other euphemism you can think of.

The most recent incarnation of that German governmental construct "grand coalition", in which the two big parties CDU and SPD form a super majority administration finally signed a minimum wage of 8.50 Euros into law with exemptions for - guess - the most vulnerable earners plus all those workers currently under a union contract below the magic number.
For all these, a transition period until 2017 was written into the law.
Small time self employed citizens are not covered by the law, meaning large numbers work for less.

The wailing and warning frenzy culminated in 2014, and we are sad to point it out, came mostly from members of one of the two "Christian" parties (Christian Democrats and Christian Social Union) as well as the "Free Democrats". The latter party has been the traditional home of lawyers, architects, self employed pharmacists and medical doctors - all of which happen to enjoy government income guarantees through binding fee schedules and ordinances. The blogster finds it only logical that folks on "minimum wages" starting at ten times the funky 8.50 Euros were among the most vocal group claiming "we don't need a minimum wage".

Another group of opponents were the "great worriers": there will be massive layoffs because employers cannot afford to pay the minimum wage, or they will have to raise prices so much that the low income earners will be no better off than before.

The massive layoffs as a result of 8.50 E didn't happen, except for two highly publicized instances, a large scale taxi driver layoff and one factory in the former East Germany. As it turned out, the taxi mogul had to admit to having done the layoffs "as a precaution", and the East German plant had been really running on government subsidies anyway.

The big price increases did not occur or turned out to be blamed on the wage increase without true attribution.
The reasons again?
The overall number of people affected by the raise to 8.50 was quite low as a percentage of the country's total workforce and because of the exemptions. In fact, we saw a stark price hike for the daily paper despite the low paid workers in the sector being on the transition schedule.

Another large group was the "over regulation and administrative burdens" chorus. They complained that employers had to record the exact hours worked.
Funny enough, when asked: wait a moment, German employers don't have to record the exact work hours right now, the answer went a bit like this: we are talking about the minijob folks who can only make 450 Euros a month, it doesn't make sense to do detailed recording for those.
As has become obvious since 2015, fudging the number of hours worked to the detriment of workers is not uncommon at all.
Of course, you can argue that having to pay amateur soccer players and coaches the minimum wage is over regulation. 
The trade union association set up a hotline to coincide with the new regulations and found that many employers showed distinct creativity in lessening or circumventing the minimum wage.

Two new approaches against the minimum wage have surfaced recently. One is that it is an incentive towards rationalization and automation. A recent article in Frankfurter Allgemeine told the story of an American restaurant owner who sold a chain of 30 eateries because he was unhappy with New York's minimum wage policy as an example.
The fact of the matter is that fast food chains have been automating and reducing staff numbers without regard to the minimum wage anyway.

In Germany, the record influx of refugees has been a welcome opportunity for the opponents of a minimum wage. Letting refugees work for less than the minimum wage is the great Trojan horse out of the conservative camp, masked as trying to help refugees and as a measure to promote integration into German society.

In case you wonder if the German "almost implemented" minimum wage is a living wage: no, it is not.

We now have hard numbers of the negative economic impact of the minimum wage: Germany expected an additional 21 billion Euros in tax revenues in 2015.