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Minimum wage is turning low-paid mini-jobs into regular work: report

Germany only implemented a minimum wage two years ago, and analysts are still assessing its economic impact. But so far one aspect has shown improvement - and it especially affects women.

Published: 20 April 2017 11:09 CEST
Minimum wage is turning low-paid mini-jobs into regular work: report
Photo: DPA

The minimum wage has played a strong role in converting low-paid mini-jobs into regular work positions, which is especially good news for women, according to a new report released on Wednesday by the Institute for Employment Research (IAB).

The number of mini-jobs converted into regular jobs was around 110,000 in 2015 when the minimum wage was launched, and this was more than double the number of conversions as in 2014.

A mini-job is a position where the employee earns no more than €450 per month, allowing people to work fewer hours free of tax. Mini-job employees earn around €5 to €10 per hour, while the minimum wage is currently set to €8.84, and they often do not receive the same kinds of benefits as permanent jobs. Mini-jobs can range from retail to healthcare to domestic work.

The jobs have been touted as a good opportunity for stay-at-home parents – mainly mums – as well as retirees and students. Proponents also have said it gives businesses more flexibility in their workforce.

But critics have observed that though the mini-job system is promoted as a stepping stone to the next position, it often does not have this result.

The minimum wage, however, appears to be shaking this up. According to the IAB report, mid-sized companies in particular decided after the implementation of the minimum wage in 2015 to turn former mini-job positions into regular job positions.

Women, the elderly and east Germans have profited from the changes above all others types of workers, the IAB found. Some though are still working part-time.

Companies specializing in transport and storage, as well as in the maintenance and repair of vehicles were the most inclined to turn mini-jobs into regular positions.

However, there was also another knock-on effect. Some firms who started employing mini-job workers in regular positions at the same time got rid of other normal working jobs.

The experts suspect that companies either placed former mini-job workers in regular positions that became free, or replaced weaker employees with more capable former mini-job workers.

Companies with relatively larger amounts of mini-jobs more frequently converted these positions. In addition, these companies created fewer new mini-jobs. The number of conversions itself did not have any additional effect on reducing marginal employment at companies.

“A little less than half of the conversions meant additional jobs subject to social insurance,” said the study authors in a statement.

A study by the Institute of Economic and Social Research (WSI) in January revealed that there could be millions of mini-job employees working too many hours, and illegally for too little pay.

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WORKING IN GERMANY

Which Bavaria-based companies regularly hire English speakers?

Bavaria is no doubt a beautiful state with a strong economy, but can be a hard place for non-German speakers to integrate. The Local takes a look at job opportunities in Germany’s southeastern 'Free State.'

Published: 7 February 2024 10:54 CET
Updated: 10 February 2024 08:20 CET
Which Bavaria-based companies regularly hire English speakers?

Munich ranks third in German cities with the highest total GDP, behind Berlin and Hamburg, but in terms of GDP per capita, it’s higher than both of them.

It also consistently ranks high, often highest, in terms of average household income.

As of 2023, nine of the 40 companies listed on DAX, Germany’s stock index, were based in Bavaria. Seven of those are based specifically in Munich.

While Frankfurt is commonly known to be Germany’s business capital, Munich can claim the title of Germany’s insurance capital, which is saying something, as Germany is home to some of the largest insurance firms in the world, like Allianz.

Beyond the state’s capital city, a number of international companies are based elsewhere in Bavaria, particularly in the Franken region, near Nuremberg.

Which companies actively hire English speakers?

Bavaria, and Munich in particular, is home to a number of companies at the forefront of international business. But the state is known for its traditional, sometimes conservative, culture, which affects its business culture as well.

Whereas companies embracing English as their primary business language are easy to find in Berlin, the practice is less common in the south. That said, there are some notable exceptions. 

Sportswear giants, Adidas and Puma, both have their headquarters near Nuremberg in Herzogenaurach, and regularly recruit English speaking international talent.

“As an international company, our teams reflect the rich diversity of our consumers and communities,” Jon Greenhalgh, Senior Manager Media Relations for Adidas told The Local. “Fostering a culture of inclusion where we value and leverage differences, ensures that we can authentically engage with our employees and truly connect with our consumers.”

He added that around 40 per cent of Adidas’ Germany-based employees are foreign nationals, from over 100 different countries.

Siemens and BMW rank among Bavaria’s top employers, and are also known to hire their fair share of foreigners.

“In Germany, we recently had around 2,000 open positions,” Konstanze Somborn told The Local on behalf of Siemens AG.

He added that Siemens operates in 190 countries. “That is why we value international teams very much…English as a common language is very usual.”

READ ALSO: ‘Which German companies want to hire foreigners?’

Similarly, BMW hires workers from a variety of backgrounds. 

“Every year, we hire lots of internationals and welcome them to the BMW Group,” Dr. Hans-Peter Ketterl, a press spokesman for BMW Group told The Local. 

But not all of these positions are available to non-German speakers.

Ketterl added that BMW’s working language is German in the country, even though, “English is an indispensable entry requirement as the second corporate language in many areas of the company.”

Check job boards and follow best practices

If it’s your first time applying for jobs in Germany, make sure to change your resume to the German format, even for English positions.

While Germany is home to its own job boards, like Xing, LinkedIn is probably the best place to start. In addition to searching for positions based in your preferred location, you can check relevant groups, like Munich Startups, to broaden your horizons.

The English Jobs in Germany website is also a good resource to start with. 

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