Berlin Federal Minister of Labor Hubertus Heil wants to implement a key campaign promise made by the SPD on October 1 and raise the minimum wage to twelve euros in one step. This emerges from his draft law, available to the Reuters news agency, which Heil distributed in the federal government on Friday.
The minimum wage is currently €9.82. According to current law, it will rise to EUR 10.45 on July 1st. The increase to twelve euros three months later corresponds to an increase of 15 percent. According to the draft, around 6.2 million employees will benefit from this, who will then receive an hourly wage of less than twelve euros. For employers, Heil expects higher wage costs of around 1.63 billion euros for the remaining quarter.
With the legal regulation, the federal government draws the wrath of the Federal Association of Employers (BDA). The central association spoke of “state wages” and an attack on collective bargaining autonomy: “This is nothing more than a resounding slap in the face for trade unions and employers’ associations.”
The Confederation of German Trade Unions (DGB), on the other hand, had called for an increase to twelve euros. “Low wages are primarily paid where there are no collective agreements,” said DGB board member Stefan Körzell, who is also a member of the minimum wage commission, to Reuters. “That’s where the increase in the minimum wage will have the greatest impact.”
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According to the draft, the minimum wage should then remain unchanged for 15 months. The minimum wage commission made up of employers and trade unions will then decide on the next increase on January 1, 2024. The Commission is to set the amount by June 30, 2023.
The statutory minimum wage was introduced in 2015 at 8.50 euros. Despite multiple warnings from experts, there were no massive job losses at the time. During the federal election campaign, the SPD and the Greens had promised a one-time increase to twelve euros this year and also anchored this in the coalition agreement with the FDP.
The reason for the increase to twelve euros in the draft law is, among other things, that the German minimum wage is rather low in comparison to the average wage in Europe. In addition, employees would be better off than comparable Hartz IV recipients who did not work. This is an additional incentive to take up employment.
More: This is how the minimum wage in Germany has developed since 2015