Accordion effect (wage spread)
The accordion effect is a term coined by Hans-Werner Sinn , with which he illustrates his thesis that unemployment among the low-skilled in Germany is due in particular to the problem of high wage costs.
definition
For Sinn, the welfare state , as it is constructed in Germany , is responsible for the high unemployment among the low-skilled. He justifies this with the fact that the German welfare state sets a minimum wage ( social assistance ) with its wage replacement benefits , which must be exceeded by the private sector if an employment relationship is to be established. Since no one is willing to work for a wage that is lower or at the same level as the minimum wage paid by the state, companies would have to set the wage sufficiently above the level of social assistance, which would push the wages above it up - the second lowest wage must be higher than the already “high” lowest wage, the third highest must be above the second highest, and so on. Sinn compares this process of “pushing together” the entire wage scale from below with the way an accordion works and describes the corresponding effect as the accordion effect.
It would raise wages in the lower and middle wage range above the market-clearing level, creating unemployment. Of course, this only applies to the low-skilled: Since the effect decreases more and more towards the top, qualified workers are also not affected by it.
To combat it, Sinn suggests that a certain gap should be created between the minimum wage of the welfare state (social assistance) and the lowest wage on the market so that an employee is ready to accept the relevant employment relationship in the first place.
criticism
Keynesian economists like Rudolf Hickel or Peter Bofinger criticize Sinn's interpretation. There is already a large wage spread with many € 400 jobs. There is no point in further cutting welfare benefits for the unemployed. So it is only about justifying low wages and making them attractive.
They also point out that the German wage replacement benefits hardly differed from those of neighboring European countries. In northern European countries, unemployment is consistently below that in Germany, despite significantly higher wage replacement benefits.
Furthermore, the PISA study indicates that the high unemployment among the unskilled could also be explained by a proportion of the labor force that is above average for an industrialized country.
Individual evidence
- ↑ See Hans-Werner Sinn: Die Basar-Ökonomie. Germany: world export champion or bottom of the league? In: Federal Center for Political Education (Hrsg.): Series of publications . tape 534 . Ullstein, Bonn 2005, ISBN 3-89331-659-0 , p. 82 ff .