Sunday

23rd Sep 2018

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.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

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.

Opinion

Mind the gap: inequality in our cities

Minimum wages, 'living' wages and a universal basic income are all part of the ongoing mix to find ways to reduce social inequality across the EU.

Airbnb agrees to clarify pricing for EU

The justice commissioner says the accommodation-rental website will better inform users about prices, and about the legal status of their 'hosts'. Facebook, however, could face sanctions if it doesn't comply with EU rules.

'Every group split' ahead of EU copyright vote

Political groups in the European Parliament are split about how to vote for a directive that would reform the EU's copyright regime - amid warnings that freedom of expression and creators' rights are at risk.

Airbnb agrees to clarify pricing for EU

The justice commissioner says the accommodation-rental website will better inform users about prices, and about the legal status of their 'hosts'. Facebook, however, could face sanctions if it doesn't comply with EU rules.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  2. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  3. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  4. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  5. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  6. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  7. IPHRCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  8. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  9. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  10. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  11. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  12. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow

Latest News

  1. Brexit and MEPs expenses in the spotlight This WEEK
  2. Wake-up call on European Day Against Islamophobia
  3. Sound of discord at 'Sound of Music' Salzburg summit
  4. Salzburg summit presses for bigger Frontex mandate
  5. UK's post-Brexit plan 'will not work', EU says
  6. Airbnb agrees to clarify pricing for EU
  7. Libya keeps coast guards rejected by the EU
  8. EU divisions on menu at Salzburg dinner

Join EUobserver

Support quality EU news

Join us