This looks to me like an extraordinarily silly decision over there in Germany:
BERLIN—Germany’s cabinet Wednesday adopted a bill to introduce a statutory pay floor of €8.50 ($11.72) an hour, a change in policy after Europe’s largest economy for decades let business groups and trade unions set pay and working times in collective agreements. The measure, which targets the five million German workers who currently earn less than €8.50 an hour, will be introduced in 2015 with a two-year transition period given to existing regional and sector-wide wage deals.
Where do we expect to see the unemployment effects of a minimum wage? Quite, in the unemployment rate of the young, untrained and unskilled. So, what can we note about the youth unemployment rate in Germany, given that up until now it hasn’t had a minimum wage that bites? Yes, quite, we can see that it’s very low compared to that of other European countries.
What do we expect to happen with the introduction of a minimum wage, especially one this high? That the youth unemployment rate will start to look more like that of other European countries of course.
Oh, and Germany also has another problem:
Government officials have said that former East Germany with its lower wage and higher unemployment levels will likely be hit hardest by the new minimum wage.
Yup. Just doesn’t look like a sensible decision to me.