High federal minimum wage in Germany has limited impact on income inequality.
The article explores how a federal minimum wage in Germany affects income inequality. By analyzing data from different sources, the researchers found that a high minimum wage may not significantly reduce inequality among households with minimum-wage workers. Low-wage earners are spread out across income levels, and wage increases may replace welfare benefits. Additionally, higher prices and reduced labor demand could offset the gains in net incomes. While a minimum wage could decrease wage inequality, its impact on disposable incomes is limited.