This contribution scrutinizes how the 2015 introduction of a general minimum wage in Germany impacts on German trade unions' membership by applying a difference-in-differences model on entries in and withdrawals from DGB affiliated unions.
The introduction of the statutory minimum wage in Germany in 2015 was a deep intervention in the autonomous negotiation of wages and working conditions by the trade unions and employer representatives. The 'Act on the Strengthening of Free Collective Bargaining' (Tarifautonomiestärkungsgesetz) was implemented in order to guarantee a decent hourly wage for the employees on the one hand and — according to its name — to strengthen the social partnership.
Trade unions welcomed the introduction of the statutory minimum wage and claimed it as a success of their long-lasting campaign. However, the minimum wage could also reduce unions' membership by substituting for one of the core union services — wage setting above the market level. This contribution investigates the net effect of these competing mechanisms.