The effects of the minimum wage regulations on commercial laundry services

Abstract

"The statutory minimum wage regulation for industrial laundries affects laundries which achieve more than 80 % of their turnover with commercial clients. The impact could only be explored by descriptive analysis and qualitative research (company survey, company case studies and expert interviews) which is mainly due to a severe lack of data. The findings of the evaluation suggest that the minimum wages have had a remarkable impact on wages. About one third of the industrial laundries which are principally covered by the minimum wage regulation (and even two thirds in eastern Germany) had to increase wages after the implementation of the minimum wages. More than 31 % of these companies increased the wages of employees in higher pay levels as well. Effects of the minimum wage regulation on employment and competition could not be detected. In company case studies, we found that other factors are assessed as more relevant for competition. The representative company survey among laundries indicated that there is a twilight zone relating to the area of application of the minimum wage regulation. Some companies assessed that they had to pay the minimum wages even though their turnover with commercial clients was at or below 80 %. Other companies with more than 80 % turnover with commercial clients did not regard themselves as being covered by the minimum wage regulation. These uncertainties may be related to ambiguous criteria of classification or a lack of information. Difficulties with the classification which may hamper the identification of non-compliance were also mentioned by the control authorities." (Author's abstract, IAB-Doku) ((en))

Cite article

Mesaros, L. & Weinkopf, C. (2012): Wirkungen der Mindestlohnregelungen für Wäschereidienstleistungen im Objektkundengeschäft. In: Journal for labour market research, Vol. 45, No. 3/4, p. 279-302. DOI:10.1007/s12651-012-0116-8