Debate over Minimum Wage versus Basic Income: Those Who Labor Reap Greater Benefits - "What's the comparison between the minimum wage and the citizen's allowance?"
Minimum Wage Workers in Germany Have More Disposable Income Than Recipients of Citizens' Income, According to New Study
A recent study conducted by the Economic and Social Science Institute (WSI) of the Hans-Böckler-Foundation has revealed that full-time workers earning minimum wage in Germany, including recipients of citizens' income in Rhineland-Palatinate, generally have more disposable income compared to those relying solely on citizens' income.
The study challenges the assumption that citizens' income is so high that the incentive for low-paid work is lacking. In Germany, the minimum wage currently stands at 12.82 euros per hour.
The wage gap between full-time workers earning the minimum wage and recipients of citizens' income is larger in Rhineland-Palatinate (572 euros) than in regions like Munich (amount not specified). For instance, a single man earning the minimum wage in Germany would have a gross monthly income of approximately 2,121.58 euros. After taxes and social security contributions, he would have a disposable income of approximately 1,572 euros. On the other hand, recipients of citizens' income in Germany would receive 563 euros in basic security and 451.73 euros for housing, totaling 1,015 euros.
The study takes into account that people with low income may also be entitled to additional social benefits such as housing benefit, child benefit, or child supplement. For a single mother with a five-year-old child working full-time with the minimum wage, her net income would be 1,636 euros. With child benefit, child supplement, housing benefit, and maintenance advance, she would have a total income of 2,532 euros. In comparison, a single mother with a five-year-old child on citizens' income would receive 1,783 euros, including the two basic security rates for mother and child, the supplement for single parents, housing costs, and immediate additional payment.
The difference in income between a single mother with a five-year-old child in full-time work with the minimum wage and on citizens' income is given as 761 euros for Rhineland-Palatinate. In other regions like Nordhausen and Vogtlandkreis, it is the highest, at 662 and 652 euros, respectively. In Munich district, Dachau, and Munich city, the wage gap for a single household is the smallest, at 379 to 444 euros.
The WSI director, Bettina Kohlrausch, emphasized that recipients of basic income, regardless of household type and region of residence, have less money than those employed at the minimum wage. She also refuted the claim that people on basic income don't want to work because they can live well on basic income, stating it as factually incorrect and stigmatizing.
The study underscores the importance of full-time employment, even at the minimum wage level, in providing a better financial standing than depending only on social welfare benefits. It serves as a reminder of the need for policies that support low-income workers and bridge the gap between minimum wage earners and recipients of citizens' income.
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