The introduction of a minimum wage is one of the most fundamental changes in the German labour law of the past years. It is one of the main projects of the current German government, within which it is even controversially discussed. This essay outlines the most important advantages that are expected in connection with an introduction of a minimum wage, such as a decrease in social spending and poverty among the elderly, an increase in gender equality and dignified working conditions. Also a reduction of wage dumping through foreign low-wage competition is discussed. Since minimum wages already exist in numerous countries, a look abroad is undertaken. In a second step this essay examines whether or not the minimum wage can live up to its expectations and points out the risks for the labour market and the national economy. Concluding, a brief overview over the most important provisions of the German Minimum Wage Act and how it adapts to the challenges, is given. The practical experience and the reasoned Minimum Wage Act refutes the critics of an introduction. The minimum wage is a courageous step in order to give an answer to some recent, unfavourable developments on the labour market.

The introduction of a minimum wage is one of the most fundamental changes in the German labour law of the past years. It is one of the main projects of the current German government, within which it is even controversially discussed. This essay outlines the most important advantages that are expected in connection with an introduction of a minimum wage, such as a decrease in social spending and poverty among the elderly, an increase in gender equality and dignified working conditions. Also a reduction of wage dumping through foreign low-wage competition is discussed. Since minimum wages already exist in numerous countries, a look abroad is undertaken. In a second step this essay examines whether or not the minimum wage can live up to its expectations and points out the risks for the labour market and the national economy. Concluding, a brief overview over the most important provisions of the German Minimum Wage Act and how it adapts to the challenges, is given. The practical experience and the reasoned Minimum Wage Act refutes the critics of an introduction. The minimum wage is a courageous step in order to give an answer to some recent, unfavourable developments on the labour market.