: Issue 02/2020

WSI-Mitteilungen 2/2020, pp. 83-92

Christoph Scherrer

The new North American Free Trade Agreement – with an improved social chapter?


The social chapter of the new North American Free Trade Agreement (USMCA) contains two innovations: the requirement for a minimum average wage in the manufacture of motor vehicles (labour value content clause) and the reform of Mexican labour law. These elements are examined for their impact on wage dumping, i. e. to what extent they protect US wage earners from further relocations and contribute to wage increases in Mexico. First, the lack of protection for wage earners provided by the former North American Free Trade Agreement (NAFTA) and the deficits in labour law in Mexico which motivated the new social chapter are identified. Following this, there is an overview of the paragraphs in the USMCA relating to labour relations before the reform provisions and also the labour value content clause in Mexican labour law are discussed in more detail. The subsequent assessment shows that the concrete form of the labour value clause makes it ineffective and that the success of the labour law reform will depend on intra-Mexican power relations. The article concludes by asking what aspects of the USMCA social chapter European trade policy should adopt. more … (in German)

WSI-Mitteilungen 2/2020, pp. 93-99

Ortrud Leẞmann, Francesco Laruffa

Beyond human capital: refining social investment


Over the past twenty years, the concept of social investment has been widely discussed both at the political and academic level and a common aim can be determined. Social investment calls for a (normative) re-orientation of welfare states with a view to “modernising” them: beyond guaranteeing social protection, they should also enhance people’s productive potential. Thus, despite its different versions, social investment essentially aims to increase labour market participation and productivity through human capital investments. This focus on economic goals has attracted substantial criticism that point to the normative weakness of this policy paradigm. The authors argue that, in order to reinforce its normative basis, social investment needs a different justification rationale (beyond its economic benefits), a different view of the individual (beyond “human capital”) and a different approach to welfare reform (democratic rather than technocratic). The capability and human rights approaches are potentially better in these three dimensions, providing a more solid normative basis to further develop welfare reform. more … (in German)

WSI-Mitteilungen 2/2020, pp. 100-109

Holger Cischinsky, Max-Christopher Krapp

Contradictions in housing-related social security Inconsistencies in policy between basic social security and housing benefit – findings and proposals for reform


In Germany, both the basic social security and the preferential housing allowance are aimed at safeguarding housing security. However, both transfer systems are associated with different administrative responsibilities, diverging target group boundaries and divergent procedures of benefit determination. For those affected, these differences are expressed, inter alia, in different incentive systems in relation to the housing choice, but also in the fact that both systems intervene differently in the personal lifestyle. These policy inconsistencies become a problem for those affected if changes between the systems are caused solely by the different update regulations, by which the basic social security and housing subsidies react to general price and rent increases. This article identifies these inconsistencies from the point of view of affected households, makes suggestions for reducing such system changes and, against this background, assesses the recently adopted dynamics of housing allowance. more … (in German)

WSI-Mitteilungen 2/2020, pp. 110-118

Oliver Bruttel, Clemens Ohlert

The importance of the legal minimum wage for refugees


The article discusses the relevance of the general minimum wage for the employment prospects of refugees in Germany. The issue is the extent to which the minimum wage affects their earnings as well as its potential role as a barrier to taking up employment. Based on wage and employment data from the Federal Employment Agency the authors show that refugees predominantly work in jobs and industries in which the minimum wage plays a significant role. It begs the question as to what extent exceptions from the minimum wage regulation would improve employment chances for these people. Existing (international) findings suggest that exempting refugees from the minimum wage is not an expedient measure towards improving their labour market integration. more … (in German)

WSI-Mitteilungen 2/2020, pp. 119-129

Thorsten Schulten, Malte Lübker

WSI Minimum Wage Report 2020: Breakthrough for the European minimum wage Initiative?


In early 2020, the European Commission formally launched consultations on a European minimum wage policy. Against this background, the WSI Minimum Wage Report analyses the current state of minimum wages in countries of the European Union, neighbouring European countries, as well as selected non-European industrial and emerging economies. It also summarises the most important initiatives for structural minimum wage increases. In many countries these are already reflected in much stronger increases, with the result that minimum wages as of 1 January 2020 have risen by a median of 6.0 % in nominal terms (4.4 % in real terms) compared with the same date in the previous year. Nevertheless, only two EU countries (France and Portugal) currently reach the target of 60 % of the median wage, below which it must be assumed that the wage level puts recipients at high poverty risk. Germany is one of the countries where the minimum wage is de facto a poverty wage. The continuous reporting on minimum wages by the WSI since 2009 is based on the WSI Minimum Wage Database, which documents time series on the development of minimum wages, prices and exchange rates for 37 countries. more … (in German)

WSI-Mitteilungen 2/2020, pp. 130-139

Thorsten Schulten, WSI-Tarifarchiv

The German collective bargaining round 2019: Sustained wage dynamics and new collectively agreed choice models


The current annual collective bargaining report of the WSI Collective Agreement Archive contains a comprehensive analysis of the 2019 bargaining round and gives an overview of the demands and results as well as a calculation of the annual wage increases. In 2019 collectively agreed wages grew on average 2.9 % in nominal terms. As the inflation rate was 1.4 % there was a significant 1.5 % increase of real wages. In 2019, the DGB affiliated unions concluded new agreements for around 8.4 million employees. At the same time a further 12.8 million employees continued to benefit largely from wage increases agreed in 2018 or earlier. In addition, in many sectors, options were agreed which allow employees to choose between pay and working time components. more … (in German)