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Study Finds Full-Time Minimum-Wage Work Pays More Than Germany's Grundsicherung

The report matters because housing and child top-ups drive the income gap and planned federal cuts to those supplements could weaken the incentive to take low-paid jobs.

Overview

  • A new Hans-Böckler-Stiftung/WSI study published on Tuesday finds that, on average, a full-time minimum-wage worker has about €623 more per month than a person on Grundsicherung and a single parent with one five-year-old has about €757 more.
  • The study’s district-level analysis shows that the extra income for workers often depends on supplementary transfers such as Wohngeld, Kinderzuschlag and Unterhaltsvorschuss rather than wages alone.
  • Many eligible people do not claim those top-up benefits, so the study’s theoretical advantage from work may not materialize in practice for a sizable share of low-income households.
  • Regional housing costs shape the gap: high rents in cities like Munich and Frankfurt shrink the wage–welfare difference because Grundsicherung pays local accommodation costs for benefit recipients.
  • Policy changes matter next: the move from Bürgergeld to a tighter Grundsicherung did not change the basic result, but the coalition’s planned cuts to housing and maintenance supplements could narrow the advantage from working and hit families hardest.