CESifo Forum 2/200735 Special THE EMPIRICAL RELEVANCE OF MINIMUM WAGES FOR THE LOW- WAGE SECTOR IN GERMANY

The possible introduction of a minimum wage in Germany has led to significant controversy over the economic effects of such a change. Some fear the dis-appearance of the entire low-wage sectors. Others see opportunities for wage increases with no appre-ciable consequences. This article presents an esti-mate of how large the group of persons affected by a minimum wage in Germany would actually be and how many jobs might be lost. The percentage of persons that would be affected by a minimum wage law can be determined by using the data from the survey on the salary and wage struc-ture in the manufacturing and service sectors (Federal Statistical Office 2007). Although this data is only current up to 2001, it has maintained its valid