Germany, the Scholz government raises the minimum wage to twelve euros per hour

Of Paolo Valentino

The executive has thus kept one of the main electoral promises. Over 6 million male and female workers will benefit from the incremental increase

FROM THE CORRESPONDING BERLIN Starting next October 1st, the guaranteed minimum wage in Germany will rise to 12 euros per hour. The German government has approved the decree-law that increases the basic hourly wagethus keeping one of Olaf Scholz’s main electoral promises.

Let’s raise the minimum wage to 12 euros, to make it immune from the risk of poverty, said the Minister of Labor, Hubertus Heil, according to whom the decision is necessary to strengthen purchasing power in the Federal Republic. Over 6 million male and female workers will benefit from the measure and the increased purchasing power is estimated at around 4.8 billion euros. The increase will take place in stages e from 1 July in reality the minimum wage will pass from the current 9.82 to 10.45 euros per hour. The bill motivates the decision with the rising prices of essential consumption and housing.

The president of the Employers’ Association, Rainer Dulger, criticized the procedure, which breaks the German tradition whereby the minimum wage commission, formed by representatives of companies and trade unions, establishes the pace and entity of increases: We move from a wage policy negotiated by the parties to one imposed by the state: a fatal development for our industrial relations system.

But the German unions postpone the criticism to the sender: The only state wage is the low one, which allows survival only thanks to public support, says Stefan Krzell, one of the leaders of the DGB, the German trade union federation. According to Krzell the increase is a matter of valorisation of work. The trade unionist hoped for swift approval from the Bundestag, the federal parliament.

Minister Heil denied that the decision constitutes an attack on the autonomy of the social partners in tariff disputes, one of the pillars of the social market economy: On the contrary, it means that in Germany we will be more tied to a tariff system.

The government provision also contains a part dedicated to so-called mini-jobs, low-paying jobs that are exempt from taxation, which will now be paid at the same rate as the minimum wage. According to the trade unions, in reality, the government has missed the opportunity to reform the mini-job system, which is heavily criticized for the lack of social protection.

At current minimum wage levels, full-time employment in Germany means a monthly salary of 1621 euros. The highest levels of minimum monthly wages in Europe are recorded in Luxembourg (€ 2257), Ireland (€ 1775), the Netherlands (€ 1725) and Belgium (€ 1658).

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