MINIMUM WAGES
A growing majority of countries use minimum wages as a tool to raise wages at the bottom of the wage distribution and to prevent workers’ families from falling into poverty. The effectiveness of these policies depends upon the level of the minimum wage and on how much minimum-wage workers receive after taxes and benefits.
In January 2015, Germany became the 26th OECD country to establish a statutory minimum wage.
At around 50% of median average earnings, the EUR 8.50 per hour minimum in Germany is close to the OECD average value.
This reform was a response to the increase in in-work poverty and the declining ability of the German collective bargaining system to create an effective wage floor. However, its effective