Decline in Low-Wage Jobs in Germany Over the Past Decade

The labor market in Germany has seen a significant reduction in low-wage employment over the last ten years. According to recent data, the number of jobs classified as low-wage has decreased by approximately 1.3 million since 2014. As of April 2024, around 6.3 million workers were earning below the low-wage threshold of EUR13.79 gross per hour, which translates to nearly 16% of all jobs in the country.

Ten years ago, prior to the implementation of the statutory minimum wage on January 1, 2015, about 7.6 million positions fell into the low-wage category, representing over 21% of the workforce at that time. The low-wage threshold was set at EUR10.00 gross per hour back then.

The decline in low-wage employment has been particularly pronounced in the eastern federal states of Germany, where the percentage of low-wage jobs nearly halved, dropping from 35% to 18%. In contrast, in western Germany, the share of low-wage positions decreased from 19% to 16%.

Low-wage employment refers to positions that pay less than two-thirds of the median gross hourly wage, excluding apprenticeships. This shift indicates a broader trend toward improving wage standards within the German labor market.

Furthermore, the income gap between low earners and higher earners has narrowed during this decade. In April 2024, the top 10% of wage earners received 3.00 times the gross hourly wage of low earners, compared to 3.48 times in April 2014. This trend reflects a gradual leveling of income disparities, although challenges remain for many low-wage workers.

While this data indicates progress in reducing low-wage employment, discussions continue regarding the need for further reforms to ensure fair wages and working conditions across all sectors of the economy.