The number of low-wage earners in Germany has decreased in recent years, according to a study by the Economic and Social Sciences Institute (WSI) of the Hans-Böckler Foundation. Low-wage earners are defined as social security-insured employees who earn less than €2,284 gross per month in full-time employment. In 2011, 21.1% of social security-insured employees earned less than two-thirds (66%) of the median monthly gross income, compared to 18.7% in 2020. The study follows the definition of low-wage earners provided by the Federal Employment Agency, which currently considers a monthly gross salary of €2,284 for full-time social security-insured employees in the “lower wage range.”
Despite the decrease in the number of low-wage earners, there are still significantly more employees in the lower wage range in East Germany (29.1%) than in West Germany (16.4%). However, the study shows that the gap is closing. In 2011, significantly more people (39.3%) in East Germany were employed in the lower wage range, while their share (16.9%) in West Germany has hardly changed. The study also reveals that the proportion of low-wage earners in cities is generally lower than in rural areas, mainly due to the presence of large industrial companies and the financial sector.
The authors of the study point out that the higher wage level in large cities and metropolitan areas does not always mean higher purchasing power, as often significantly higher rents are incurred. In addition to the place of residence or work, the industry also has a strong influence on the wage level. In the hospitality industry, agriculture and forestry, and temporary work, more than half of full-time employees earn less than two-thirds of the median monthly gross income. The lowest proportion of low-wage earners is in the public sector (2.5%). The study also reveals that the fewest low-wage earners live in Wolfsburg (6.4%) and the most in the Erzgebirgskreis (43.2%).
In conclusion, the study shows a positive trend in the reduction of low-wage earners in Germany. However, there are still significant differences between East and West Germany, as well as between urban and rural areas and industries. The authors of the study suggest that further measures are needed to address these disparities and ensure fair wages for all employees.
