minimum wage

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Under the minimum wage is understood in the economic one by law or collective agreement fixed salary , which as a minimum price applies and must not be exceeded.


The determination takes place through a legal regulation, a fixation in a generally binding collective agreement or implicitly through the prohibition of usury . A minimum wage regulation can refer to the hourly wage or the monthly wage for full-time employment . In addition to national minimum wages, there are also regional variants, e.g. B. refer to states or cities. Other manifestations are industry-specific minimum wages.

A declaration of intent adopted by the International Labor Organization (ILO) in 1970 to introduce procedures for the contractual setting of minimum wages had ratified 51 of the 181 ILO member states at the beginning of the 21st century. According to statistics from the ILO, there are minimum wages in over 90% of its member states.

Sector-specific minimum wages and a general statutory minimum wage are controversially discussed in science and politics under social and labor market policy aspects . A main argument in favor of minimum wages is the improvement of the income situation of employees in the low-wage sector , a main argument against it is the threatened loss of jobs. The effect of minimum wages on employment levels is controversial. The level of the minimum wage in relation to the general wage level is decisive for the possible effects.


Law concerning the International Convention on the Establishment of Procedures for Determining Minimum Wages (1929, Germany)

Minimum wages have been fought for several times in history by the labor movement through strikes . The motive was so-called “starvation wages” which, in times of great competition on the labor market, were so low that they were insufficient to secure basic needs . The first local minimum wage regulations existed towards the end of the 19th century. From 1894, the city of Amsterdam only awarded public contracts to companies that did not pay their employees below a minimum wage. In 1896 New Zealand introduced wage arbitration bodies through the Industrial Conciliation and Arbitration Act , followed by Victoria, Australia , in 1899, and Great Britain in 1909, which introduced similar arbitration bodies. The Australian minimum wage system has its origins in the ' Harvester Judgment' (1907), and the Argentine with the Ley 10.505 de trabajo a domicilio (German: Home Work Act) enacted in 1918 . A number of developing countries also adopted minimum wages in the first half of the 20th century, including Sri Lanka with the Minimum Wage Ordinance of 1927. In 1938, national minimum wages were introduced in the United States on the grounds that white workers were ahead of them to protect black people who were considered inferior at the time . The year before the introduction of the minimum wage was then also the last year in which black unemployment was lower than that of whites. Other countries with long experience with minimum wages include a. France (since 1950) or the Netherlands (1968).

The introduction of statutory and collectively agreed minimum wages was only sparsely used to combat poverty until after the Second World War . Only at the end of the war did the number of countries with minimum wages increase significantly again. The ILO , which is made up of representatives of trade unions , employers and the states, has now also passed several international labor conventions on minimum wage regulations: the Minimum Wage Fixing Machinery Convention (No. 26) in 1928 , then the Minimum Wage Fixing Machinery (Agriculture) Convention in 1951 ( No. 99) and finally in 1970 the Minimum Wage Fixing Convention (No. 131).

Today there are regulations that regulate the legal framework for agreeing minimum wages in 22 of the 28 countries of the European Union . In Europe, especially in the 1990s after the collapse of the Soviet Union, there was a significant increase in the number of countries that passed laws that were adapted to their national circumstances.

South Africa

As part of its apartheid policy, South Africa's government enacted the Wage Act (Act No. 5/1957) in 1957 , the earliest version of which had been enacted in 1925 ( Act No. 25/1925 ), which was intended to apply to non-unionized workers (for blacks there are strong restrictions) or industries without a tariff structure to make suitable specifications. For this, the labor minister called the wage boards could ( Wage Boards) set up, worked out the recommendations and forwarded to the Ministry as a suggestion. In June 1973, 355 wage board determinations were promulgated in the Official Gazette of the Government of Pretoria as wage determination , according to which some 500,000 workers (including some 300,000 blacks) were affected. Section 5 (b) of the law restricted that the wage commission should show the groups of employees the amount of wages to be paid for them, so that it is in accordance with the “civilized standard of living”, by which only whites were meant .

This view was already a tradition in South Africa and is associated with the term Civilized Labor Policy (German: "Politics for civilized work"). A former labor minister, the Social Democrat Frederic Cresswell , around 1924 defined " uncivilized work" as employment by people who limit themselves to a lifestyle with only the bare minimum of obligations, as is common among "barbaric and undeveloped people". The nationalist-social-democratic government Hertzog ( Nasionale Party ) -Cresswell ( South African Labor Party ) disseminated its view of employment in public government statements ; The Prime Minister's Circular No. 5 of 1924 .

In practice, the wage commissions are often based on the companies with the lowest rate of return. However, companies in the mining , agricultural and service sectors were exempt from the statutory minimum wage regulations, which was due to electoral considerations at the time. However, many companies obliged to do so paid below this minimum limit. The wage commissions were even responsible for checking compliance with the legally defined limit values, and there was a complaint authority for this purpose. The lack of advice for the employees concerned and their mostly short-term employment contracts prevented appropriate corrections of these grievances.

The system of wage commissions was used after 1945 within the framework of industrial policy to question general minimum wage regulations in the area of border industry , which had settled in the edge zone around the homelands through a conscious control and promotion policy . Here the apartheid government showed itself ready to override the otherwise applicable stipulations by means of specific wage determinations (German for example: "wage determinations") or industrial council agreements (German for example: " industrial council agreements ") in order to grant special low wages in industrial investments near the border which were made even more difficult by job seekers from neighboring homelands under constant pressure.

Economic theory

The economic effects of minimum wages are controversial.

While classical economics until the late 19th century and its successor the neoclassical theory consider the labor market to this day in the sense of a free market like a goods market, Keynesianism in the early 20th century introduced economic policy in the sense of a regulated market into theoretical considerations . The assumption of perfect labor markets was fundamentally criticized by John Maynard Keynes in General Theory . The New Institutional Economics took up this perspective again. Newer theories incorporate the imperfections in the labor market into studies or take into account that labor markets are derived or regulated markets.

Some of these theses:

  • The economist Gary Fields believes that a labor market should not only be viewed in its own sector, as it is not protected from the effects of other market sectors. The conditions for the labor market in one industry can, for example, influence those in another industry, so that the simple textbook assumption of a market model does not apply.
  • Walter Eucken , founder of ordoliberalism , which is considered to be the basis of the social market economy , argues that the supply curve can run abnormally if people have to expand the supply of labor to secure their livelihood while wages are falling. Should such a problem arise over a longer period of time, Eucken suggests that the state set minimum wages.
  • The modeling of efficiency- wage-theoretical connections regards entrepreneurs and employees not only as mere adapters to external conditions, but as active and possibly innovative actors. A minimum wage could lead to increased motivation of employees or induce companies to qualify minimum wage earners. With increased productivity, the company's profits also increased.
  • An increased search behavior with higher wages u. U. can lead to more employment because a job offer is then more likely to be accepted; on the other hand, it also leads to a decline in the low-wage sector.

Various evaluations of the literature come to the conclusion that the theoretical analysis does not show any clear negative employment effects of a minimum wage. According to the Expert Council for the Assessment of Macroeconomic Development (SVR), “ the judgment on the minimum wage depends on the practical relevance of the model assumptions. In other words, an empirical analysis is ultimately required. ".

Neoclassical theory

According to neoclassical economic theory , a minimum wage keeps those workers out of the labor market for whom the entrepreneurial return on their work is below the cost of their job as determined by the minimum wage .

In the neoclassical model , an equilibrium is always established on a free market due to the laws of supply and demand , as is the case on the labor market . In equilibrium, the amount of labor offered corresponds to the labor required and the wage offered corresponds to the wage demanded. This is known as the equilibrium wage.

Purchasing power theory

According to the demand-oriented purchasing power theory, a minimum wage increases the overall consumption of the economy. The wage earners in the low-wage sector therefore consume the majority of their income directly. According to this theory, the prerequisite for a positive net effect on the economy is given by the fact that the demand effect is greater than the price increases due to higher wages. For example, high-income earners might reduce their savings to pay the higher prices, and the incomes of the new minimum wage earners have increased anyway. More needs to be invested to compensate for excess demand. Therefore, when the savings rate falls, investment activity is not reduced, but increased because of the increase in purchasing power: “In a macroeconomic view, however, and this is the only relevant perspective for economic policy, the idea of ​​saving prior to investment is misleading. The core of the misunderstanding lies in the always guaranteed identity of realized savings and realized investments. "


Representatives of supply policy deny that the introduction of minimum wages can create a demand effect. In contrast to price increases, the effects of demand-controlling measures only take effect after a long time lag. When a minimum wage is introduced, a company no longer produces or sells goods and therefore no longer has more money; it must therefore either lay off staff, cut salaries or reduce profits. So negative demand effects occur first. If the increase in low wages at a later point in time actually produces real demand effects, the accumulated demand will not change, but only shifts in the demand decision. As a rule, due to the lower savings rate of the new demand structure, the demand for capital goods decreases, which in the medium term leads to an increase in unemployment.

It is also criticized that those companies benefit from the purchasing power gain of wage earners that are less burdened by the wage increase. On the one hand, there are companies in the capital-intensive branches of the economy that employ relatively few people, and on the other, foreign companies that often produce more cheaply.

Further positions in the economic discussion

Economist Gregory Mankiw argues that a minimum wage is equivalent to

  1. a salary subsidy for unskilled workers, paid through
  2. a tax on employers who employ unskilled workers.

The first part of the policy benefits low-wage workers, while the second discriminates against specific employers.

Hence, some critics of the minimum wage argue that a negative income tax benefits larger parts of the poorer population while spreading the costs more equitably across society as a whole. That the negative income tax brings poor workers a greater monetary advantage at lower costs to society was documented in a report by the Congressional Budget Office .

According to Lewis F. Abbott, employing companies are economic organizations, not charities, and national minimum wages are inefficient, costly, and dysfunctional methods of raising the living standards of poor households. It is much more convenient and cost effective for the government to:

  • maximizes opportunities to work regardless of the market value of the work; According to Abbott, even the simplest jobs offer valuable work experience and opportunities for further development;
  • Low wages topped up or subsidized if necessary and
  • Saves money in other areas, combats inflation and abolishes various artificial, politically induced burdens that make wage subsidies necessary in the first place.

Empirical studies and forecasts

International findings

Literature overviews of empirical studies on the employment effects of minimum wages, compiled by the OECD in 1998 and 2003, show that, in contrast to older studies, which consistently found only negative effects, grossly contradicting results were now obtained. Results that either do not provide any statistically significant statements or those in which the economic effects may play a role were rated as contradicting. In addition to negative employment effects, especially among young people, it was also found that the poverty rate can only be reduced to a limited extent through minimum wages, as many poor households receive no income from gainful employment and employees with minimum wages often live in households with a higher earner. The different qualitative results from nine countries summed up: In 24 cases there was support for the neoclassical standard model, i.e. evidence for negative employment effects. Contradictory results were found in seven studies and unexpected results, i.e. either no or even positive employment effects, were shown in 15 cases.

In its evaluation of recent studies, the German Advisory Council on Macroeconomic Development comes to the conclusion that in the United States and Great Britain, where the minimum wage is so low that less than 2% of employees are affected, not only “as a rule no or at most slightly negative, but sometimes even positive employment effects of a minimum wage ”were found. In France, where the minimum wage is so high that 15.6% of employees are affected, there were, in contrast, some strong negative effects on employment, especially among young people and women. In this country, which, according to the SVR, "is most comparable to Germany in terms of its institutional set of rules on the labor market", the job losses due to the increase in the French minimum wage are considerable. “Laroque and Salanié (2002) determine a significant influence of the minimum wage on the level of unemployment.” Other studies determine at most a slight negative employment effect of the SMIC. Further studies assess the employment policy effects of minimum wages as a result of productivity-increasing effects through changed corporate strategies as positive. In addition, further positive influences on growth and employment are to be expected through strengthening domestic demand, so that a negative employment effect is put into perspective.

According to the ILO , serious increases in minimum wages lead, empirically verifiable, to job losses for those employees who work at the minimum wage. On the other hand, there are no significant employment effects in the case of moderate increases .

A study from 2013 claims to resolve the contradictions of the different studies. Accordingly, after the introduction of a minimum wage, jobs are rarely lost directly, instead fewer new jobs are created from now on.

German findings

See the section on Empirical Studies in Germany .

Situation in different states


Minimum wage worldwide in US $ / h, 2019
  • no data
  • no minimum wage
  • 0.00-1.00
  • 1.01-2.00
  • 2.01-3.00
  • 3.01-5.00
  • 5.01-7.50
  • 7.51-10.00
  • 10.01-16.88
  • Minimum wage and unemployment rate , 2004

    In most EU countries the minimum wage is defined as the gross monthly wage, in Great Britain , Ireland and Germany as an hourly wage. In 2015, 22 of the 28 member states of the European Union had a statutory minimum wage.

    In Austria , Switzerland , Italy and the Scandinavian countries, there is no minimum wage set by the respective government, partly because more value is placed on collective bargaining autonomy . In Denmark , Finland and Sweden , collective bargaining coverage is over 90%. In Austria there is also an almost nationwide collective bargaining agreement.

    In Germany in 2009 an industry or company collective agreement was used for 65% of employees subject to social insurance contributions in western Germany and for 51% in eastern Germany . The proportion of employees in Germany whose wage and working conditions are regulated by a collective agreement has been on a downward trend since 1996. A statutory minimum wage was introduced in Germany on January 1, 2015.

    Minimum wages in Europe and some other countries as of January 2017:

    country Euro / hour ** Euro / hour (adjusted for purchasing power) *** last changed
    / valid from
    Luxembourg 0 [00]11.9717 01/01/2019
    France 9.76 9.04 01/01/2017
    Ireland 9.55 7.38 01/01/2018
    Netherlands 9.52 8.52 01/01/2017
    Belgium 9.28 8.47 06/01/2016
    Germany [00]9.35 01/01/2020
    Great Britain 8.79 8.50 04/01/2016
    Slovenia 4.65 5.69 01/01/2017
    Spain 4.29 4.65 01/01/2017
    Malta 4.25 5.16 01/01/2017
    Portugal 3.36 4.05 01/01/2017
    Greece 3.35 3.92 03/01/2012
    Estonia 2.79 3.61 01/01/2017
    Turkey 2.73 4.83 01/01/2017
    Poland 2.65 4.92 01/01/2017
    Croatia 2.51 3.71 01/01/2017
    Slovakia 2.50 3.67 01/01/2017
    Czech Republic 2.44 3.73 01/01/2017
    Hungary 2.35 4.04 01/01/2017
    Lithuania 2.45 3.61 01/01/2018
    Lithuania [00]2.63 01/01/2019
    Latvia 2.25 3.17 01/01/2017
    Romania 1.65 2.64 07/01/2016
    North Macedonia 1.50 3.22 01/01/2016
    Serbia 1.43 2.66 01/01/2017
    Bulgaria 1.42 2.96 01/01/2017
    Albania 0.92 1.88 07/01/2013
    Ukraine 0.68 3.01 01/01/2017
    Russia 0.58 1.54 07/01/2016
    Moldova 0.56 1.56 05/01/2016
    Australia 11.890 9.20 07/01/2016
    New Zealand 9.60 7.75 04/01/2016
    Canada * 7.65 6.93 01/01/2017
    Japan * 6.85 5.95 01/01/2017
    United States 6.55 5.94 07/24/2009
    South Korea 3.86 5.18 01/01/2017
    Argentina 2.47 5.92 01/01/2017
    Brazil 1.10 1.71 01/01/2017

    * Weighted average of regional minimum wages
    ** Conversion into euros using the euro reference rate for the annual average 2015
    *** Conversion using the purchasing power parities for private consumption as reported by the World Bank for 2014


    May 1, 2019 in Hamburg: Workers want a minimum wage of 12 euros
    Minimum wage on tour (2007)

    The German labor law has six kinds of minimum wages:

    In Germany, a general statutory minimum wage has been in effect for the first time since January 1, 2015 due to the Minimum Wage Act (MiLoG). Since 2020, the minimum wage has been € 9.35 gross per hour. In addition, there are special industry minimum wages in several industries. These take precedence over the general minimum wage if they are higher than the general minimum wage ( Section 1 (3) MiLoG). During a transitional period up to the end of 2017, minimum wages in the sector were still allowed to fall below the general minimum wage ( Section 24 (1) MiLoG). According to a study by the German Institute for Economic Affairs , the minimum wage fell below 3.8 million workers in Germany in 2018.

    The industry minimum wages are generally determined by collective agreements and are legally binding for all employment relationships in this industry through a state legislative act. The legally binding nature of the minimum wage in the sector arises from Section 3 of the Posted Workers Act (AEntG) in conjunction with a general declaration of the collective agreement pursuant to Section 5 of the Collective Agreement Act or - alternatively - in conjunction with an ordinance issued under Section 7 of the AEntG. For the care industry, special provisions apply according to Sections 10 to 13 AEntG.

    The industry minimum wages also apply to employees who are posted to Germany by a foreign employer. They also apply to (temporary) employees if and as long as their employer (lender) hires them to another employer (hirer) who falls within the scope of an industry minimum wage ( Section 8 (3) AEntG). In addition, a minimum wage collective agreement can become generally binding for the temporary employment sector itself through a statutory ordinance pursuant to Section 3a (2) AÜG. One speaks here of a lower wage limit.

    General statutory minimum wage

    The general statutory minimum wage was introduced in Germany by the Minimum Wage Act that came into force on January 1, 2015. Since January 1, 2020 it has been € 9.35. The amount was determined by the legislature.

    The level of the minimum wage can be changed on the proposal of a standing commission of the collective bargaining partners (minimum wage commission) by ordinance of the federal government . The commission is reappointed every five years by the federal government. It consists of a chairman, three permanent members with voting rights from the employee and employer side, as well as two members from academic circles without voting rights (advisory members).

    All employees are entitled to the statutory minimum wage. Interns who are hired to acquire professional skills, knowledge, abilities or professional experience are also entitled to do so , without this being a professional training course within the meaning of the Vocational Training Act (BBiG). This does not apply to schoolchildren or students who complete the internship as part of their school education or study or for orientation internships of up to three months or for measures funded by the employment agency to acquire an entry-level qualification.

    Young workers and trainees are also excluded from the right to the minimum wage . Employees who have been unemployed for at least 1 year (long-term unemployed within the meaning of Section 18 SGB ​​III ) are only entitled to the minimum wage after six months of employment. For a transitional period, newspaper deliverers had a lower minimum wage, namely € 6.38 until the end of 2015, € 7.23 until the end of 2016 and € 8.50 until the end of 2017 ( Section 24 (2) MiLoG).

    In addition, it was possible to deviate from the statutory minimum wage downwards by means of generally binding collective agreements by the end of 2016. The minimum wage has been in force in all sectors since 2017, even if a collective agreement provides for a lower wage.

    Any other agreements that fall short of the minimum wage or limit or exclude its assertion are ineffective in this respect. Employees can only waive the minimum wage through a court settlement. The minimum wage cannot be forfeited. Compliance with the minimum wage is monitored by the financial control of undeclared work (FKS) of the customs administration . In order to facilitate the control, there are additional reporting and documentation obligations for employers. The Federal Labor Court ruled in September 2017 that the minimum wage is the lower base for night surcharges calculated on the basis of actual hourly earnings.

    Before the introduction of the minimum wage in Germany at the beginning of 2015, warnings were often given of negative consequences for the labor market and severe job losses. One year after its introduction, no such consequences were observed.

    Current statutory minimum wages and wage floors in the individual sectors

    Minimum wages based on collective agreements, statutory ordinances within the meaning of the Posted Workers Act
    Branch In effect from Date of Expiry Gross earnings per hour worked
    Education and training services 1st January 2018 December 31, 2018
    • Nationwide: 15.26 €
    Main construction trade
    (excluding roofing trade and scaffolding trade )
    April 1, 2020 December 31, 2020
    • Unemployed nationwide and skilled workers east (wage group 1): € 12.55
    • Skilled worker Berlin (wage group 2): € 15.25
    • Skilled worker west (wage group 2): 15.40 €
    Electrical trade January 1, 2020 December 31, 2020
    • Nationwide: 11.90 €
    Money and value services January 1, 2020 December 31, 2020
    • Stationary services East, Berlin: € 12.16
    • Stationary services in Rhineland-Palatinate, Saarland, Schleswig-Holstein: € 12.69
    • Stationary services Bremen, Hamburg, Lower Saxony, Baden-Württemberg: € 14.80
    • Stationary services Bavaria, Hesse, North Rhine-Westphalia: € 15.03
    • Mobile services East, Berlin: € 14.42
    • Mobile services Schleswig-Holstein: € 14.68
    • Mobile services in Rhineland-Palatinate, Saarland: € 15.80
    • Mobile services Bremen, Hamburg, Hesse: € 16.79
    • Mobile services in Baden-Württemberg, Bavaria: € 17.11
    • Mobile services Lower Saxony: € 17.41
    • Mobile services in North Rhine-Westphalia: € 18.00
    Scaffolding 1st July 2019 July 31, 2020
    • Nationwide: 11.88 €
    Painting and varnishing trade 1st May 2018 April 30, 2021
    • unskilled workers nationwide: € 10.85 (from May 1, 2020: € 11.10)
    • Trained employees (journeymen) West and Berlin: € 13.30 (from May 1, 2020: € 13.50)
    • Trained employees (journeymen) East: € 12.95 (from May 1, 2020: € 13.50)
    Care industry (care for the elderly and home care by care companies) 1st January 2018 April 30, 2020
    • West and Berlin: € 11.35
    • East: € 10.85

    For the care industry, according to Section 4 of the AEntG, a collective agreement is replaced by a proposal by a commission which, in addition to the unions and non-church employers, also includes representatives of church care employers and the employees they employ. This takes account of the so-called third way of the churches, which, on the basis of their right of self-determination, refuse to conclude collective agreements or to submit to collective agreements.

    Chimney sweep trade 1st October 2018 December 31, 2020
    • Nationwide: € 13.20
    Stonemasonry and stone carving trade 1st September 2019 April 30, 2020
    • Nationwide: 11.85 €
    Lower wage limit according to the Temporary Employment Act
    Branch In effect from Date of Expiry Gross earnings per hour worked
    Temporary workers (temporary) June 1, 2017 December 31, 2019
    • West: € 9.96
    • East and Berlin: € 9.66

    In other sectors, a minimum wage is legally possible, but not in force. The following industries are affected:

    Letter services
    With the Post Minimum Wage Ordinance, minimum wages were declared binding for the industry in accordance with the collective agreement, which the employers' association Post Services e. V. and the United Service Union "ver.di" closed in November 2007. However, the Federal Administrative Court , like the previous instances, considered the Post Minimum Wage Ordinance to be unlawful and therefore invalid.
    Demolition and scrapping industry
    A minimum wage of € 9.10 to € 11.96 applied here until December 31, 2008.

    In the hairdressing trade , the parties to the collective bargaining agreement have agreed on a nationwide minimum wage. The collective bargaining agreement was declared generally binding in accordance with § 5 TVG and published in the Federal Gazette on December 13, 2013:

    • West: € 7.50 (from August 1, 2014: € 8.00, from August 1, 2015: € 8.50)
    • East and Berlin: € 6.50 (from August 1, 2014: € 7.50, from August 1, 2015: € 8.50)

    In the case of general liability, the wage is not binding for foreign employers who send hairdressers to Germany.

    The Federal Statistical Office registered the lowest collectively agreed gross hourly wages in the eastern German federal states in the second half of 2006. For example, security guards for events in Thuringia earned € 4.38 at the time, while the hourly wage for hairdressers in the first year of their career in Saxony was € 3.82. 4.6 million employees in Germany received less than € 7.50 per hour.

    Empirical research

    According to a study by the Halle Institute for Economic Research and the Ifo Institute in 2007, the minimum wage instrument harbors the risk that the resulting increase in incomes could lead to job losses among low-wage earners. A DFG study (microdata analysis of the minimum wage effects of the Posting of Workers Act ) for the German construction industry, also published in 2007, showed no major effects overall with regard to the employment effect. The investigation showed in detail, to a minimal extent, both negative effects for eastern Germany and positive effects for western Germany. The significance of the two studies was assessed differently. Researchers from the union - related Hans Böckler Foundation note a controversial discussion within economics on the relationship between minimum wages and employment, but deny the consequences of job losses.

    In 2011, on behalf of the Federal Ministry of Labor and Social Affairs , six leading economic research institutes evaluated eight of the twelve industry-specific minimum wages in Germany. The consortium made up of the IAB (Nuremberg), RWI (Essen) and ISG (Cologne) institutes analyzed the minimum wage in the construction industry, ZEW (Mannheim) took over the roofing trade and waste management, and the IAQ (Duisburg) provided laundry services in the commercial customer business and building cleaning and the IAW (Tübingen) the care industry, the painting and varnishing trade and the electrical trade. The aim of the studies was to examine the existing minimum wages with regard to their effects on employment, employee protection and competition. The results were published in summary form in a special edition of the Zeitschrift für Arbeitsmarktforschung. The analyzes are largely based on microdata and comply with the standards of international minimum wage research. Methodologically, the difference-of-differences approach was used, in which the outcome variable (e.g. employment or wages) is compared between a group of affected persons and a control group, similar to a drug study before and after the introduction of the minimum wage. Overall, the results suggest that employment losses due to a minimum wage have largely not materialized, even if there are large regional differences. In particular, in eastern Germany, clear effects of the lower wage limit on the wage distribution can be demonstrated.

    Further scientific studies on the economic effects appeared in a special edition of the German Economic Review . A study by Frings, for example, examines the employment effects in both the electrical and the painting and varnishing industries. The results suggest that the introduction of the minimum wage in the industry did not have any negative effects on employment, despite the high level of concern in some cases. In the study by Boockmann, Krumm, Neumann and Rattenhuber for the electrical industry, the authors come to a similar conclusion. The study by Aretz, Arntz and Gregory, on the other hand, also takes into account wage groups with earnings above the minimum wage in their analyzes and finds a reduced likelihood of continued employment in the roofing industry, especially among skilled workers in eastern Germany. Another study looks at the roofers' earnings situation in the course of the minimum wage. The results show that while the wages of the low-wage earner have increased, the earnings of the more skilled workers have deteriorated at the same time. The findings speak in favor of a reduced wage differentiation and return on education in the skilled trades. With an impact rate (number of employees with wages below the next minimum wage level) of over 50%, the roofing trade is one of the sectors most affected by the minimum wage. Another study by the Universities of Tübingen and Linz on the shadow economy in Germany predicts that the introduction of the minimum wage on January 1, 2015 will increase the shadow economy by 1.5 billion euros, although according to the model estimate this is only a relatively small part of the necessary adjustments to the minimum wage matters.

    Political debate in the run-up to the introduction of the minimum wage

    Proponents of the minimum wage saw the demands for minimum wages as a necessary component of humane work in the context of human dignity .

    One position saw the statutory minimum wage as a suitable and necessary instrument to prevent social distortions through low wages , in particular as compensation for the reduced collective bargaining coverage and the increasing number of “ top-ups ” who receive a wage below the social assistance level and are therefore entitled to additional benefits Have unemployment benefit II . Their representatives referred to corresponding foreign regulations.

    The opposing position rejected the minimum wage. She feared negative effects on the economic situation and job losses. She suggested other models for solving possible social problems.

    The collective bargaining agreement had decreased because the instrument of general binding declarations (AVE) was less used. Data on this include tariff registers that are maintained by the BMA , state ministries and the WSI . From January 1, 1999 to January 1, 2006 (red-green coalition) the number of AVE fell from 591 to 446 collective agreements (i.e. by 25%).

    During the reign of the grand coalition (2005–2009, Merkel I cabinet , Federal Labor Minister : Franz Müntefering ) there were relatively few discussions on the subject of the minimum wage.

    Since the election campaign leading up to the 2009 Bundestag elections , the issue of 'minimum wages' has been discussed more intensely again; also before the federal election 2013 (September 22nd) and the Bavarian state elections (September 15th 2013) and Hesse (see below).

    In December 2011, the green-red state government of Baden-Württemberg ( Cabinet Kretschmann I ), together with Rhineland-Palatinate and Hamburg, submitted a motion for a resolution to introduce a minimum wage to the Bundesrat (BR). The BR majority at the time rejected the application. Due to the state elections in Lower Saxony on January 20, 2013 , the majority in the Bundesrat changed.

    The Federal Council passed a resolution on March 1, 2013 (BR-Drucksache 136/13) and on May 3, 2013 the resolution Good Work - Shaping Sustainable and Fair Labor Policy . In the latter, the Bundesrat calls on the Federal Government and the Bundestag to initiate and implement comprehensive legal changes for the purpose of “securing adequate wages, in particular by introducing a nationwide general statutory minimum wage of at least EUR 8.50 gross in Germany”.

    On May 8, 2013, data from new statistics from the Federal Employment Agency (BA) became known.

    • 2012 there were about 323,000 households with a so-called annual average Hartz IV - spiking relating to social insurance gross income of more than 800 euros. In 2009 there were around 20,000 fewer.
    • The number of these single full-time or part-time jobbers dependent on Hartz IV rose in the same period by 38% to around 75,600.
    • A total of around 1.3 million Hartz IV recipients were employed on average in 2012, about as many as in 2009. Almost half of them had a mini job.

    In May, Zeit online stated that some serious media had drawn incorrect conclusions from statistical figures and published reports with titles such as regular jobs are enough to live with less and less ( Spiegel Online ).

    Collective bargaining parties The food-gourmet restaurant union (NGG) and the United Service Union (ver.di) demanded a statutory minimum hourly wage of € 8.50, which should later rise to € 9.00. This amount is based on the minimum wages of economically comparable EU countries. The resulting net income is below the seizure exemption limit . The IG Metall called for after initial skepticism a minimum hourly wage of € 8.50. The German Trade Union Federation (DGB) had also taken on the demand for a statutory minimum wage of € 8.50. As a fall-back solution, the statutory minimum shouldsupplementthe instruments of generally binding declaration and the Posted Workers Act . The IG Bergbau (IG BCE) rejected an industry-unspecific legal minimum wage and favors industry-specific solutions. The IG Bauen-Agrar-Umwelt had already negotiated significantly higher industry minimum wages for members in parts of its organizational area (for example in construction). Since this is not possible for all sectors in collective bargaining, she continues to support the DGB's demand for a nationwide minimum wage of € 8.50.

    The Federal Association of German Employers' Associations (BDA) was (as of 2007) against the statutory minimum wage; in 2007 it saw 1.7 million jobs threatened by the minimum wage.

    Political parties In the coalition negotiations in November 2013, the SPD , CDU and CSU agreedin the coalition agreement to gradually introduce a nationwide minimum wage of 8.50 euros for 2015 with possible exceptions until 2017.

    The CDU rejected a nationwide statutory minimum wage for many years on the grounds that it feared a job-destroying effect. With the aim of safeguarding or creating jobs for the low-skilled , she instead demanded a minimum income that should consist of a combination of wages and a state wage subsidy. After the Bundestag election in 2009 , the CDU and the FDP agreed in the coalition agreement not to introduce a general minimum wage in Germany (“We reject a uniform statutory minimum wage”).

    At the beginning of 2010, the new Federal Labor Minister Ursula von der Leyen advocated further industry minimum wages. In May 2011, the Christian Democratic Workers' Union (CDA) called for minimum wages. Karl-Josef Laumann (federal chairman of the CDA - Christian Democratic Workerships - and chairman of the CDU parliamentary group in North Rhine-Westphalia) fought for years within the party for minimum wages. He was ultimately able to convince the federal executive committee of the CDU under Angela Merkel, and at the Leipzig party congress on 14/15. November 2011 the CDU decided to campaign for the introduction of a generally binding lower wage limit, which should be determined by a commission of the collective bargaining parties. She refused to allow politics to influence this lower wage limit. The term “lower wage limit” instead of “minimum wage” was chosen in order to differentiate itself from political competitors.

    The SPD called with the argument of equal pay a statutory minimum wage, which the case of full-time employment subsistence guaranteed. She demanded that the minimum wage should be enshrined in law, apply across the board and be at least € 8.50 per hour.

    For a long time, the FDP argued against a statutory minimum wage. She feared negative consequences for the economy and a decline in employment for low-skilled jobs. She wanted to counter the negative social consequences of low wages by introducing citizens' benefits. The change of course by the CDU and other factors sparked a debate in the FDP about the future course. The topic was discussed at the federal party conference on May 4, 2013 ; finally 57% of the delegates voted for the (new) line of the FDP party leadership.

    The party Die Linke demanded in 2007 that a minimum wage of € 10 be enshrined in law, which should then increase annually at least as the cost of living increases.

    Alliance 90 / The Greens (November 2011) proposed a minimum wage commission based on the British model, which should be made up of representatives from trade unions, employers' associations and academia, regardless of political influence, and which should determine the level of the minimum wage taking into account social and economic requirements.

    In the long term, the pirates demanded the establishment of a commission of experts based on the Dutch model to set a statutory minimum wage. In the short term, a minimum wage of 9.02 euros for permanent and 9.77 euros for fixed-term employment was required in 2013.

    The employers criticized the fact that the introduction of the minimum wage would also result in a considerable increase in bureaucracy , since the working hours of all employees had to be precisely recorded. This brings with it considerable additional costs and legal uncertainty, such as a. the DIHK criticized.

    Expert council for assessing macroeconomic development

    In its annual report from 2006, the Council of Economic Experts dedicated a section entitled Minimum Wages - A Wrong Path to the subject of the minimum wage and examined the arguments for and against the introduction of a minimum wage. The analysis came to the conclusion: "The conclusion is that none of the arguments for the introduction of a minimum wage is really convincing." (P. 407). With regard to the employment effects to be expected, the Council of Economic Experts wrote: “Contrary to what was suggested in the discussion, a statutory minimum wage in Germany is likely to have negative employment effects.” (P. 408) and: “In connection with international experience, therefore, with regard to to expressly warn against the introduction of a minimum wage in Germany on the expected employment effects. This applies all the more in view of the currently discussed level of a statutory minimum wage of € 7.50 and more. ”(P. 407).

    The member of the Expert Council, Peter Bofinger , had a different opinion. He proposed a minimum wage of € 5. In his opinion, the introduction of a minimum wage would not have negative consequences for employment (p. 422 ff.).

    Organization for economic cooperation and development

    The Organization for Economic Cooperation and Development forecast in 2013 that Germany's trade balance surplus with member states of the European Union would also exceed the 6% limit required by the EU in the coming years and recommended that Germany introduce a statutory minimum wage. Their recommendation did not contain any information on an appropriate level of the minimum wage.

    Federal states

    In Bremen , a new state minimum wage of 11.13 euros will apply from July 2019 for employees of public companies and institutions, for employees of grant recipients e.g. B. in cultural or youth institutions, for student assistants as well as employees of institutions that conclude wage agreements according to social law and people on the social labor market.


    In France , a statutory minimum wage was introduced in 1950, which has been known as the Salaire Minimum Interprofessionnel de croissance (SMIC) since 1970 and is enshrined in the constitution and labor law. The amount of the gross minimum wage is adjusted once a year to the overall economic situation and according to political requirements. The gross minimum wage has been € 10.15 per hour since January 1, 2020, which corresponds to a monthly wage of € 1,539.42 for a 35-hour week.

    The statutory social security contributions (13.7% of the gross SMIC) and other mandatory contributions such as the CSG (Contribution sociale généralisée) and the CRDS (Contribution au remboursement de la dette sociale) are deducted to cover the health insurance debt or the social security debt (8 % of 97% of the gross SMIC).


    Ireland: economic development before and after the statutory minimum wage

    In Ireland since 1 April 2000 a statutory minimum wage applies. For 18 to 20 year olds, young professionals and interns, reduced minimum wages of between 70% and 90% of the full rate are payable. In the years before 2000, sector-specific minimum wages in Ireland were negotiated by the Joint Labor Committees. These industry regulations resulted in a significantly lower hourly wage than the current minimum wage and only applied to just under a quarter of the workforce. In 2004, 3.1% of full-time employees received the minimum wage.

    An economic study presented in 2002 showed that the increase in employment in companies in the low-wage sector was not significantly different from that in companies that were not affected by the minimum wage legislation. However, the number of companies affected is overestimated. Taking into account the increase in the general wage level, the authors found that the minimum wage may have had a statistically significant negative employment effect in the small number of firms that were particularly hard hit by the introduction of the minimum wage.

    The DIW points out that the minimum wage in Ireland was introduced during a period of strong economic growth and significantly decreasing unemployment. In addition, there is "a long series" of exemptions.


    minimum wage
    Group of people per month
    Qualified from 18 € 2570.39
    Unqualified from 18 € 2141.99
    17-18 years old € 1,713.60
    15-17 years old € 1606.50

    In Luxembourg , since January 1, 2009, there is no longer any distinction between "workers" (ouvriers) and "employees" (employés privés) under labor and social law ; henceforth there are only “salary earners(salariés) . A minimum salary is required by law for all employment relationships. On January 1, 2020, the minimum salary was redefined depending on age and qualifications according to the table opposite. The “social minimum wage” (le salaire social minimum) is a basic benchmark of the Luxembourg social insurance and corresponds in amount to the minimum wage for unqualified persons over the age of 18, currently € 2,141.99 per month.


    In Lithuania , a minimum wage of EUR 400 (before tax) has been in effect since January 1, 2018, which is EUR 349 ​​after tax for employees without children. From January 2016, the amount was 350 euros and 380 euros from July 2016 to December 31, 2018 (before taxes). In October 2016 there were 223,200 employees (or 20.2% of all employees) who only earned the minimum wage. In the low-wage area, for example, there are doctors in further training (assistant doctors ) who earned 391.5 euros (before taxes) in 2017 (1.28 euros per night work hour).


    In Namibia there is a minimum wage for three sectors. The minimum wage for domestic workers (as of 2018) is N $ 9.03 per hour, for farm workers at N $ 4.62 per hour (as of 2019) and for security guards between N $ 8.76 and 10 per hour (as of 2017).


    The Netherlands has had a statutory minimum wage since 1968, and younger employees receive 30% to 85% of the general amount. The law on this was passed by parliament on November 27, 1968. At that time the minimum wage was 100 guilders per working week. The Dutch Ministry of Labor decides on increases after voluntary consultation of the so-called Socio-Economic Council, which is made up of employers, trade unions and external parties.

    In order to avoid shocks from excessive increases, the Dutch government adjusts the minimum wage more often, on January 1st and July 1st of each year to reflect economic developments. In principle, bound by the latter, political decisions by the ministry can lead to an extraordinary increase or stagnation of the minimum wage. After the minimum wage was not increased from 2003 up to and including 2005 due to political decisions and the poor economic situation, it rose by 0.6% on January 1, 2006. The general statutory minimum wage was set on July 1, 2019 at € 19,627 gross per year for full-time employees aged 21 or older. In 2004 4.2% of all Dutch employees were paid at the minimum wage level.


    In Austria , some of the companies that are members of the Chamber of Commerce are subject to collective agreements that are concluded between the Chamber of Commerce and the relevant industry associations or trade unions. There, binding minimum wages are specified depending on the classification of the activity and seniority. A general collective agreement (for all branches) was not introduced in Austria. Organizations that are not subject to a collective agreement (some non-profit organizations, non-final WKÖ departments) are not obliged to pay a minimum wage .

    In Austria , a minimum wage of € 1,000 gross was introduced for many industries on January 1, 2009 through a stipulation in the collective agreements between the WKÖ and ÖGB . Since 14 monthly salaries per year are common almost everywhere in Austria for tax reasons (12 ordinary salaries plus 2 tax-privileged "special payments" equal to one month's salary), this corresponds to € 14,000 per year, or € 12 * 1,167. Apprentices and interns are excluded. On April 15, 2009, there were still three collective agreements with a minimum wage of less than € 1,000: confectionery, in certain sectors of the clothing industry and in publishing. In addition, for some industries, such as waste management, there were no collective agreements at all.

    It should also be noted that any collective agreements regulate the minimum wages for blue-collar and white-collar workers very precisely, but atypical employment relationships , which have shown strong growth in recent years, are often not or insufficiently taken into account. Freelance workers and contractors as well as, under certain circumstances, employees in apprenticeships (interns, working students) are considered to be employees in atypical employment relationships . A study from 2002 showed that atypical employees in Austria usually have to accept financial losses and are less socially secure than employees who do the same work.

    As early as 2003, the coalition pact between the ÖVP and the FPÖ provided for a minimum wage of € 1,000, but was not implemented. In 2006, the SPÖ and ÖVP agreed in the coalition pact on a uniform minimum wage of € 1,000. The social partners WKÖ and ÖGB reached an agreement in July 2007 for implementation by January 1, 2009; however, not through general collective agreements, but through collective agreements in the industries. Only if the implementation has not taken place by 2009 will the general collective agreement come into force for all areas covered by the WKÖ and ÖGB. The liberal professions (e.g. dental assistant) still form a gap. The agreement of the social partners has made a legally regulated minimum wage less likely. (see standardization of the collective agreement ) .

    The lowest income in the various sectors agreed under collective agreements had risen from € 1,000 in 2008 to € 1,300 in 2010. In a number of industries with a coverage of around 80%, it has been € 1,500 since 2014. The Austrian trade unions want to raise it to € 1,700 since mid-2015.


    In Switzerland , minimum wages can only be anchored in a generally binding manner within the framework of collective labor agreements (GAV) or normal federal employment agreements . For unskilled employees in housekeeping, for example, a minimum wage of CHF 18.90 applies. Around 60% of wage earners are not covered by minimum wages.

    On November 27, 2011, citizens of the French-speaking canton of Neuchâtel , who are entitled to vote, agreed to a statutory minimum wage with 54.6%; thus Neuchâtel is the first canton with a minimum wage enshrined in the constitution. In addition, on the same day, the citizens of the French-speaking cantons of Geneva and Vaud voted to include the minimum wage in their constitutions. The canton of Geneva voted with 54.2% and the Vaud with 51.1% against a minimum wage.

    The Swiss Confederation of Trade Unions (SGB) demanded a minimum wage of 3550 Swiss francs in 2008 (around € 2,250 at the rate at the time). This is considered the subsistence level for a single parent with one child. On May 18, 2014, the SGB's minimum wage initiative failed at the ballot box; the voters rejected a minimum wage of CHF 22 (based on the rate at the time, around € 18.50) with a large majority of 76.3%.


    The Spanish minimum wage was introduced under dictator Francisco Franco in 1963 and was last modified in 1980. In the last week of each year, the Spanish government, after voluntarily consulting the trade unions and employers, announces the minimum wage rate applicable from January 1st of the following year. Should it deem it necessary, the government can also arrange for a second adjustment of the minimum wage, known as Salario Mínimo Interprofesional , in one year.

    In Spain, the minimum wage is the benchmark for a number of other regulations, including national unemployment benefit, integration benefit after prolonged unemployment or severance payments in the event of early termination of an employment contract. This makes it an important political instrument, even if its validity for only 0.77% of the workforce in Spain means that it is not of great economic importance due to its relatively low level of 37.7% of the national average income.

    In Spain, the statutory minimum wage ( Salario mínimo interprofesional , or SMI for short) is what a worker should earn regardless of his or her profession and is stated in amounts per day, per month or per year. It is published annually in the Boletín Oficial del Estado (BOE).

    Since 2019 the minimum wage has been € 900 / month. In 2011, more than 30% of citizens resident in Spain received the minimum wage. In December 2011, the minimum wage was frozen for one year for the first time since its introduction by the government under Mariano Rajoy .

    South Korea

    As of January 1, 2018, the minimum wage was increased by 16.4%. In July 2018, a commission decided to increase it by 10.9% to 8,350 won (EUR 6.30) as of January 1, 2019 . Moon Jae-in had announced before his election as president that the minimum wage would be raised to 10,000 won over the five years of his term in office.


    The minimum wage in Turkey was set on January 1, 2019 at 2558 TL gross and 2020 TL net minimum wage per month (approx. 303 euros, as of 12/19).


    The country's minimum wage had increased at least 14 times during hyperinflation from 2017 to spring 2019, and was worth around $ 7 a month in May 2019.

    United Kingdom

    Great Britain: economic development before and after the minimum wage

    In 1999, the Labor government under Prime Minister Tony Blair introduced a national minimum wage . According to the UK Low Pay Commission's 2006 report, there are 1.3 million people in the UK working for the minimum wage. However, lower minimum wages exist for under 22-year-olds as well as for older employees in a new job during the first six months if a further training measure is attended at the same time. The minimum wages since March 2020 have been:

    • £ 8.72 (€ 10.02 1 ) 25 years and older,
    • £ 8.2 (€ 9.43 1 ) (21 to 24 years old),
    • £ 6.45 (€ 7.42 1 ) (18 to 20 years old),
    • £ 4.55 (€ 5.23 1 ) (under 18),
    • £ 4.15 (€ 4.77 1 ) (trainees).
    1 Exchange rate as of April 19, 2020

    The Low Pay Commission has a major influence on the structuring of minimum wages; it is independent and consists of three representatives each from business, science and the trade unions. Every year, mostly in March, it publishes a report in which the effects of the minimum wage on the economy as a whole and the low-wage sector are comprehensively examined, and recommendations for the future level of the minimum wage, on the basis of which the government then adjusts its value in October of each year undertakes.

    The 2007 Metcalf study found that one in ten employees is currently affected and that, following the introduction of the minimum wage in Great Britain, real and relative wage levels in the low wage sector have increased and the wage gap between men and women has narrowed. Analyzes carried out in different ways reveal little or no impact on the overall level of employment, except on the number of hours worked. The feared negative employment effects were presumably counteracted by labor market frictions , income tax allowances, non-compliance with legal regulations, productivity improvements, price increases and profit reductions. In a more recent assessment of the British model, the comparatively more favorable labor market development is not attributed to the fact that the labor market has become more flexible, but to the more favorable institutional framework for macroeconomic action compared to the euro zone.

    United States

    Overview of US States and Territories Minimum Wage Regulations, January 1, 2013
  • higher than national minimum wage
  • equal to the national minimum wage
  • no regulation
  • lower than national minimum wage
  • lower than national minimum wage and sector-specific
  • Lower state minimum wage regulations are broken by federal law.

    A statutory minimum wage has existed in the USA since 1938. It was introduced then at a value of US $ 0.25 per hour and has increased regularly since then; its strongest purchasing power was in 1968 at $ 1.60 an hour, which at 2013 prices was equivalent to $ 10.70. As of July 2009, the American minimum wage has been $ 7.25. A lower amount of US $ 2.13 (tipped wage) can be paid if a tip is expected, with the employer having to increase the wage up to the statutory minimum wage if necessary.

    On February 13, 2014, Barack Obama raised the minimum wage for employees whose employers work for the government on a contract basis from US $ 7.25 to US $ 10.10 by decree. This minimum wage for such employment contracts is valid from January 1, 2015.

    The federal government is with its provisions before a national minimum wage, from which the states may deviate upwards. A large number of federal states have so far made use of the possibility of increasing the minimum wage independently, and in some states cities have also issued their own minimum wage regulations. San Francisco , California, has the highest statutory minimum wage in the US since January 2013, at $ 10.55. Although the minimum wage is perceived as a controversial issue between the two parties in politics, voters in four particularly Republican states voted in 2014 decided to raise the minimum wage, in some cases considerably: South Dakota , Arkansas , Nebraska and Alaska were affected . In 2012, 1.15% of Americans, or 3.6 million, worked at or below the minimum wage. 1.6 million received the minimum wage, while around 2.0 million were below. The latter is due to exceptions to the Minimum Wage Act and the limitation of the law to employees paid per hour.

    The study “Minimum Wage Effects Across State Borders” published in 2010 by the Labor Market Research Center at the University of California at Berkeley came to the conclusion that higher minimum wages in the USA over the past 16 years have not led to any job losses.

    The New York State has decided a minimum wage of 15 dollars. It applies from January 1, 2019 to all companies with at least eleven employees.


    Web links

    Wiktionary: Minimum wage  - explanations of meanings, word origins, synonyms, translations

    Individual evidence

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    29. Yucef Ghellab: Minimum Wages and Youth Unemployment . (PDF) ILO, 1998
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    33. Peter Ellguth, Susanne Kohaut: Collective bargaining agreement and company interest representation: Current results from the IAB company panel 2009. In: WSI-Mitteilungen. Issue 4, 2010, pp. 2004–2009.
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    37. in 2019
    38. German Trade Union Confederation (Ed.), Minimum Wage Act, information for litigation representatives, courts, honorary judges and advisory trade union secretaries, 2015, p. 8.
    39. a b Second ordinance to adjust the level of the minimum wage (Second Minimum Wage Adjustment Ordinance MiLoV2)
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    41. Statutory ordinances issued on the basis of § 7 AEntG
    42. in the version of the First Act to amend the Temporary Employment Act
    43. Minimum Wage Act, Section 1, Subsection 2
    44. BAG, judgment of September 20, 2017, Az. 10 AZR 171/16, full text and BAG, press release No. 40/17 .
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    56. (PDF)
    57. ( Memento from February 22, 2014 in the Internet Archive ) (PDF)
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