Fiscal Costs of a Minimum Wage
German Economic Institute (IW)
Calculations based on the IW-Simulation Model suggest that a minimum wage of 8.50 euro would save the government 5 billion euro if it had no negative effects on the labor market. If the minimum wage, however, leads to significant job losses among low-skilled workers it would burden taxpayers with an extra 0.8 billion euro. If the job losses include a sizable number of full-time workers the extra tax burden will rise to 6.6 billion euro. In the long run the negative effects on the fiscal balance would presumably grow because companies would invest less and the human capital of the unemployed would degenerate.
Download | PDF
European Minimum Wage Directive and Strengthening Collective Bargaining Coverage
The EU Minimum Wage Directive recommends that EU Member States achieve a collective bargaining coverage of 80 per cent to ensure adequate minimum wages.
IW
Collective bargaining coverage and functional income distribution in international comparison
The study examines whether a high level of collective bargaining coverage influences the functional income distribution between companies and employees.
IW