Thursday

23rd Mar 2017

Germany adopts minimum wage

  • Germany will have a minimum wage from 2015 on (Photo: EUobserver)

The German parliament on Thursday (3 July) approved the introduction of a minimum wage of €8.50 per hour from 2015 on, a policy shift that could boost growth elsewhere in Europe.

Of the 601 votes cast, 535 voted in favour of the law, five lawmakers voted against it and 61 abstained.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

About 3.7 million workers are estimated to benefit from higher wages, according to government projections, or about 9 percent of the workforce.

German Chancellor Angela Merkel and her business-friendly Christian Democrats last year had to agree to the minimum wage in order to be able to form a coalition government with the Social-Democrats.

Germany for a long time relied on negotiations between trade unions and employers where minimum wages were negotiated per sector - constructions, agriculture, services and other.

Trade unions criticised the new law for incorporating too many loopholes and exemptions which will de facto still keep some sectors of the economy below the €8.50 per hour, as they have transition periods for another two years.

In addition, short-term interns, trainees, long-term unemployed and people under the age of 18 can be paid less.

"These exemptions hit the most vulnerable in the labor market, of all people. Millions of people will continue to be exposed to the arbitrariness of starvation wages," said the head of the Ver.di trade union, Frank Bsirske.

The bill still has to be approved by the upper house, the Bundesrat, which has backed the minimum wage in the past.

Germany, which is the largest economy in Europe, was one of only seven in the 28-strong EU not to have a minimum wage. Its low wage policy combined with low consumption, combined with strong exports was criticised by the EU commission and the International Monetary Fund for being unhelpful for other countries in the eurozone which are struggling with recession and unemployment.

The adoption of the minimum wage, even with all its caveats, marks a shift in the austerity-driven policy of Angela Merkel which southern countries have long called for.

But business circles in Germany are less happy about the development.

Germany's Ifo economic institute has warned Germany might lose up to 900,000 jobs, many of them part-time, because businesses will no longer be able to afford these workers.

"In the short term, the minimum wage will stimulate the economy, but in the long run it could become a problem for international competitiveness," ING chief economist Carsten Brzeski said.

EU trade unions condemn court for minimum wage ruling

EU trade unions have strongly criticised the latest EU court judgement on the right of member states to set minimum wages for foreign workers, saying it is an invitation to social dumping. Britain's largest trade union said the ruling could affect construction for the 2012 Olympics in London.

Eurozone chief in 'drinks and women' row

[Updated] The Netherlands' Jeroen Dijsselbloem faces calls for resignation after saying that crisis-hit countries in southern Europe spent "money on drinks and women" before being helped by others.

Greek bailout talks to 'intensify'

Greece and its creditors will meet in Brussels later this week to unblock negotiations needed for a new tranche of financial aid, amid concerns over the country's economic situation.

Stolen Russian billions ended up in EU states

Illicit money flowing out of Russia ended up in almost every single EU state, an investigation has found, posing questions on the integrity of Europe’s banking systems.

News in Brief

  1. Man arrested in Antwerp after trying to mow people down
  2. Marine Le Pen goes to Russia
  3. Dutch post-election talks prioritise green-right coalition
  4. EU summons Turkish envoy over threats to Europeans
  5. British police make first arrests in London terror probe
  6. EU commission has received Facebook reply on WhatsApp
  7. Rome expects thousands of protesters at summit
  8. Dijsselbloem says his comments had 'Dutch directness'

Stakeholders' Highlights

  1. Malta EU 2017New EU Rules to Prevent Terrorism and Give More Rights to Victims Approved
  2. European Jewish Congress"Extremists Still Have Ability and Motivation to Murder in Europe" Says EJC President
  3. European Gaming & Betting AssociationAudiovisual Media Services Directive to Exclude Minors from Gambling Ads
  4. ILGA-EuropeTime for a Reality Check on International Day for the Elimination of Racial Discrimination
  5. UNICEFHuman Cost to Refugee and Migrant Children Mounts Up One Year After EU-Turkey Deal
  6. Malta EU 2017Council Adopts New Rules to Improve Safety of Medical Devices
  7. Nordic Council of MinistersNordic Energy Research: How to Reach 100 Percent Renewable Energy
  8. Party of European SocialistsWe Must Renew Europe for All Europeans
  9. MEP Tomáš ZdechovskýThe European Commission Has Failed in Its Fight Against Food Waste
  10. ILGA-EuropeEP Recognises Discrimination Faced by Trans & Intersex People
  11. Nordic Council of Ministers25 Nordic Bioeconomy Cases for Sustainable Change
  12. European Free AllianceSupporting Artur Mas: Democracy and Freedom Cannot Be Convicted

Latest News

  1. 'No zero terror risk', EU security commissioner warns
  2. UN could step in where EU fails in child migrant protection
  3. May: London attacker was known to the police
  4. Ending the migrant deal with Turkey may save the EU
  5. Poland unlikely to face EU discipline on rule of law
  6. Rutte courted Wilders' voters, now he must deliver
  7. Barnier to UK: trade talks will come after settling accounts
  8. EU declaration to voice unity in troubled times