The Federal Minister of Labour and Social Affairs wants to raise the minimum wage in Germany to 12 euros per hour, after a report revealed that almost 10 million people earn less than that.

Raising the minimum wage

In response to a request from the Left party, the Federal Statistical Office (Destatis) recently revealed that 9,99 million people working in Germany earn less than 12 euros an hour. This amounts to around one-quarter of Germany’s labour force. Across the country, the average gross hourly wage was 19,37 euros, with the gastronomy industry being the worst paid at an average of 10,99 euros an hour.

The lower wage limit has been in effect in Germany since 2015, when it was set at 8,50 euros. It applies to all employed adults, except in the first six months of work after long-term unemployment. At the end of June this year, the minimum wage commission recommended raising the minimum wage from its current rate of 9,35 euros to 10,45 euros in four stages by mid-2022.

Raising the minimum wage

Now, the Federal Minister of Labour and Social Affairs, Hubertus Heil (SPD) wants to raise the minimum wage threshold in Germany to 12 euros. Heil agrees that the minimum wage should be raised in accordance with the Commission’s recommendations. “But that's not enough for me," he said. "According to the law, my job is to examine the entire mechanism five years after the minimum wage was introduced."

Heil wants to institute new requirements for the minimum wage commission. “In Autumn, I will make suggestions for further developing the minimum wage and strengthening the wage agreement,” he said. "At the moment, the further development of the minimum wage is strongly based on the development of wages, I can imagine that we give the Commission another criterion and that focuses more on the development of median incomes.”

The Commission usually recommends that the minimum wage is adjusted in relation to the average wage in Germany. Trade unions have criticised this, arguing that this is a purely statistical figure. Conversely, economists and employers have warned of the political requirements for a higher minimum wage, which, they argue, would put employment at risk. Heil stated that raising the minimum wage is not only fair, “but it also makes economic sense, because it will strengthen people's purchasing power.”