Home » Economy » the increase in the minimum wage endorsed by the new coalition

the increase in the minimum wage endorsed by the new coalition

The future German Chancellor Olaf Scholz had made it one of his main campaign promises, in the name of the necessary « respect » to provide to employees. The measure was endorsed in the coalition agreement negotiated with its environmental and liberal partners: the minimum hourly wage will be increased to € 12 gross against € 9.82 currently. “This represents a salary increase for 10 million of our fellow citizens”, rejoiced Olaf Scholz.

→ ANALYSIS. “We want to dare more progress”: in Germany, Olaf Scholz presents his coalition agreement

The current minimum wage entered into force in 2015 at a level deemed too low by the SPD, dissatisfied with the work of the federal commission responsible for reassessing it every two years. With this measure, the future government is therefore pulling the rug out from under it and taking matters into its own hands.

Women, the primary beneficiaries

Employees in the service, commerce, catering, hotel and construction sectors will be the main beneficiaries of this increase. Unlike the powerful German industry where employees earn more than the minimum wage, these sectors have little, if any, branch agreement. This measure will also benefit a largely female public, living in the east and north of the country where, since German reunification, a large low-wage sector has developed.

From summer?

If no date has yet been set for the entry into application of this increase in the minimum wage, the SPD intends to make it one of its first laws for the year 2022. The measure could come into force as early as the summer.

The unions are calling for swift action to offset current inflation. In October, consumer prices rose 4.5% – the highest level since 1993 – and could even climb to 6% year on year in November. “Millions of people need urgent help”, insists the catering union NGG. Hospitality representatives take a dim view of a measure that they believe will increase their total costs by 15 to 25%.

The fear of an inflationary spiral

The increase in the minimum wage will also have repercussions on mini-jobs, these odd jobs limited to 10 hours per week. If they do not disappear, their remuneration will increase from € 450 to € 520. The measure could also indirectly benefit employees earning more than these € 12 gross per hour by forcing branch agreements to be renegotiated in order to ensure a difference with the minimum wage.

This is what worries the German Federal Bank. Opposed to such an increase in the minimum wage, the Bundesbank fears a “Inflationary spiral of wages and prices »Across the Rhine.

.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.