Low-Wage Work in Germany

In 2004, Germany’s unemployment rate was 10.2 percent, much higher than the euro zone average of 8.8 percent. Some policy analysts have suggested that persistently high unemployment is the result of Germany’s strong unions, high wage floors, strict employment protection laws, and generous unemployment benefits. Recently, the German government has sought to redress issues in its labor market by lowering payroll tax rates on low-wage employees. Germany also features a unique vocational training system, a traditional family model that strongly steers women towards a life outside of the paid labor market, and a newly liberalized immigration policy that is allowing more workers into the country even as many Germans experience long spells of joblessness.

These unique institutions, along with other facets of the German labor market, make a comparison between low-wage jobs in the United States and Germany particularly revealing. To this end,  the Foundation is funding a group of case studies of low-wage work in Germany to be run by researchers from the Institute for Work and Technology in Gelsenkirchen, Germany. They will compare low-wage jobs in public and private hospitals, in-house and outsourced call centers, independently owned and chain hotels, and low-skill food retail outlets and higher-end specialist retailers.