Is the minimum wage killing off 'minijobs'?
Published on: 20 May 2015 11:00 CET
The report by the Minijob Centre showed that since January 1st, when minimum wage laws took effect, the number of minijobs had shrunk by about 237,000 jobs to 6.6 million by March 31st - a decrease of 3.5 percent since December 31st.
A minijob is a position where the employee earns no more than €450 per month, allowing people to work a smaller number of hours free of tax. Minijob employees earn around €5 to €10 per hour, while the minimum wage is set to €8.50, and they often do not receive the same kinds of benefits as permanent jobs.
Minijobs can range from retail to health care to domestic work.
The jobs have been touted as a good opportunity for stay-at-home parents - mainly mums - as well as retirees and students. Proponents also have said it gives businesses more flexibility in their workforce.
Some have criticized the system, saying that while it was intended to be a stepping stone to the next position, the minijob system does not offer employers incentive to turn such jobs into regular employment and it could even replace regular positions.
But the latest figures show that the minimum wage could be turning the tables.
Minijobs in east German states, where workers generally earn less than in the west, were particularly affected by the minimum wage with Saxony-Anhalt showing the largest decrease of 7.7 percent and Thuringia showing a decrease of 6.6 percent.
Economic research institutes had warned of a threat to mini-jobs from the minimum wage.
A spokesperson for the Minijob Centre declined to comment to DPA, but a Federal Employment Agency spokesperson told newspaper Süddeutsche Zeitung that "the introduction of the minimum wage plays a role here".
"If we take the two months after the introduction of the minimum wage together, it shows a decline in mini-jobs of about twice as much as the number fell by in previous years," the spokeswoman told the newspaper.
A study by the German Ministry for Family Affairs in 2012 found that women were especially vulnerable to getting stuck in a minijob, writing that the system had unintentionally become a "program for creating lifelong economic powerlessness and dependence of women".
Most of those taking on minijobs at the beginning of this year were women, according to the Minijob Centre figures, with 60.8 percent women and 39.2 percent men.
The sector where minijobs actually rose slightly was within private households, where by the end of March there were 284,000 minijob holders, an increase of about 6.1 percent on the previous year.
"The trend towards registration of domestic workers continues," said the head of the Essen Minijob Centre, Dr. Erik Thomsen in a statement.
An overwhelming majority of domestic workers in minijobs were women at 91.4 percent.
Additionally, the only age group to see an increase in minijob workers was the 60 to 65 (2.8 percent) and over 65 (1.7 percent) age groups.