Are the effects of the minimum wage overestimated?

Abstract

"Lower limits to wages can make an effective contribution to limiting the development of inequality in the lower area of wage distribution. But here, however, the effects of the instrument must not be overestimated. A minimal legal wage has a protective function. It corrects excesses and undesirable developments, for instance by preventing a downwards spiral through which a company ousts others by way of low wages and not, for example, by way of innovations or better products. However it is not a panacea for fighting poverty, nor does it in any way lead to needs-based justice. The planned minimum wage will likewise not make a substantial reduction to the number of "topper-uppers" (Aufstocker), according to current microsimulations." (Textauszug, IAB-Doku)

Cite article

Möller, J. (2014): Werden die Auswirkungen des Mindestlohns überschätzt? In: Wirtschaftsdienst, Vol. 94, No. 6, p. 387-392.