Germany to raise hourly minimum wage to €12

The general minimum wage in Germany will be raised to €12 per hour, the cabinet decided on Wednesday, fulfilling a key electoral promise of Social Democrat Chancellor Olaf Scholz.

According to the draft law adopted by the government, the increased rate would come into force on 1 October this year. For the law to definitively pass, parliament still has to give its approval.

“The minimum wage raise is my most important law,” Scholz said during the election campaign in summer 2021, vowing to “immediately get this off the ground” once elected. Government parties now hailed the approval of the law as a kept promise.

Around 6.2 million employees will benefit from higher wages under the law, while the increase will disproportionately benefit women, Scholz stressed on TV channel ZDF Wednesday.

However, the news is not to everyone’s liking.

Employers’ organisations criticised the governments’ decision to interfere in setting the minimum wage level as a violation of free collective bargaining.

Since its introduction in 2015, the wage floor has been determined by a commission of employer and employee organisations, who traditionally play an important role in Germany. However, Scholz and Employment Minister Hubertus Heil have promised that the government intervention would be a one-off measure.

The increase would put Germany among the EU countries with the highest minimum wage in nominal terms, although it would still be topped by Luxembourg, Ireland, the Netherlands and Belgium, according to the national statistics institute.

(Julia Dahm | EURACTIV.de)