• 06/17/2020
  • Corona-Krise

Minimum wage and old age poverty due to competition distortion through subsidies from tax money

LIQUI MOLY CEO Ernst Prost on social dumping at the expense of the state

Ladies and gentlemen. 

At the moment I am getting my ass kicked because I am in favor of increasing the minimum wage. Many companies would then no longer be profitable - so they say - if they had to pay higher wages,  so they would rather maintain their profits than give workers the wages they need for their livelihood and which they have earned by generating the company's profit? Well, that can't be it especially not when the state uses all our tax money to help these employees and thus indirectly those companies. Through these type of employments, tax money needs to be generated to fight old-age poverty. Thus, companies profits are subsidized and the profitability for the company is increased by supplementing the to low wages for workers with state money. 

How is it possible that in one and the same industry companies with this minimum wage strategy are still bumbling around, while others are able to pay decent salaries, also covered by collective bargaining agreements agreed with trade unions and workers councils? In this way, companies use their tax payments to finance directly and indirectly the subsidies of companies that do not maintain such standards and then even define themselves on the market through cheap prices. After all, there is no art in being cheap if I do not pay my workers decently, disregard tariffs and make minimum wages the yardstick for my calculation. This is completely out of line with the market economy, an abuse of the social systems and a distortion of competition. Competition should be fought over better performance, not over the resourceful exploitation of the welfare state and certainly not over the disregard of standards of occupational safety, environmental protection and wages.

Conclusion: People must be able to live from their work and this should be possible with only one job. Companies that do not want to or cannot meet their social responsibility by offering fair and adequate wages should come up with a different business model or increase their prices - but under no circumstances should they be put in a position to use dumping prices to undermine healthy companies by obtaining all kinds of grants or subsidies directly for themselves and their employees or by sending their teams to the Federal Employment Agency to supplement their meager wages.


Ernst Prost