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German low-wage job sector expanding

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German low-wage job sector expanding
Photo: DPA
10:27 CEST+02:00
Germany's low-wage sector is growing at an alarming rate, according to a labour market study of the world's third largest economy.

More than one German in five works in the "low wage" category, a higher proportion than in Britain but below that in the United States, a press report said on Friday.

The left-of-centre Frankfurter Rundschau quoted researcher Gerhard Bosch as saying the trend was a troubling development.

"The conclusions for Germany are worrying," said Bosch, who is director of the IAQ institute at the university in Duisburg-Essen.

He participated in a study carried out in Britain, Denmark, France, Germany, the Netherlands and the United States.

In Germany, the number of people considered to be earning low wages increased from 15 percent to 22 percent over the past 10 years, reaching a total of 6.5 million people.

The rate for Britain was 21.7 percent while in the United States, 25 percent of workers were categorised by the study as low-wage earners. Denmark showed the lowest level at 8.5 percent.

The IAQ institute also noted that Germany had "extremely low salaries, less than €5 ($7.95) an hour," that were paid to around two million people.

"We did not expect such an unflattering result for Germany," the study said.

However, the institute nonetheless noted in a statement that "while both Germany and the US have large shares of low-wage workers, German workers receive health insurance, four weeks of paid vacation, and generous old age support-benefits most low-wage workers in the US can only dream of."

Europe's biggest economy is in the midst of a debate over extending a new minimum wage for postal workers to other sectors. That would represent a sea change in a country where such questions are normally settled between unions and management representatives rather than by state intervention.

Unions and part of the German left support setting a general minimum wage, while economists and many on the right oppose such a move. Six German economic institutes warned on Thursday that a minimum wage of even €4.50 per hour would result in the loss of jobs for unskilled workers.

"In recent years, the German government has intentionally expanded the low-wage work sector in an effort to reduce exceptionally high levels of unemployment," the IAQ said.

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