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Press Release Minimum Wages are Unsocial: CDU/CSU Plans Breach Market-Based Rules
The Initiative for a New Social Market Economy (INSM) has great concerns about the minimum wage plans of the CDU. “A statutory minimum wage now means to change course just when the great goal of full employment has come within sight”, says INSM chief executive Hubertus Pellengahr.
According to Pellengahr, „every year a quarter of the so-called low earners become normal earners. A minimum wage robs many people of their chances to enter the labor market and hence of their chances to earn higher incomes”. The Initiative for a New Social Market Economy has recently published a study by the Institute for the German Economy Cologne (IW Köln; download of the study) about the low-pay sector in Germany. According to the study starting salaries offer promotion prospects and also protect against poverty. “The introduction of a comprehensive minimum wage jeopardizes those who the politicians are pretending to protect; namely the low-qualified“, says the INSM chief executive. “Minimum wages are not suitable for combating poverty“.
It is the firm belief of the INSM that minimum wages breach a decisive market-based principle which states that jobs are only created when productivity is higher than costs. “Those who do not recognize this key market-based principle destroy jobs and are responsible for unemployment”, says Pellengahr.
According to the INSM, the path to permanently higher wages without rising unemployment is not via administratively determined minimum wage levels, but via the liberation of the market-based dynamic. Pellengahr: “Where there is growth, job prospects rise just like the distribution leeway for increasing incomes”.
If you have any queries, please do not hesitate to contact us:
Press officer: Florian von Hennet, phone +49 30 / 27877-174, hennet@insm.de
