Minimum Wage to Rise to €13.90 in 2026 Amid Employer Accusations of Political Maneuvering
Berlin – Germany‘s minimum wage is set to increase to €13.90 per hour on January 1, 2026, followed by a further rise to €14.60 in 2027, after the federal cabinet approved the recommendations of the national minimum wage commission on Wednesday. However, the agreement is sparking controversy, with employer groups alleging the ruling social Democratic Party (SPD) misrepresented the outcome to secure a political win despite facing low approval ratings.
The phased increase, which requires no further approval from the Bundestag or Bundesrat, impacts millions of low-wage earners across the country. While proponents hail the move as a vital step towards fair compensation, critics warn of potential price increases and economic strain on businesses, particularly small and medium-sized enterprises. The current minimum wage stands at €12.82 per hour.
The decision follows months of debate within the minimum wage commission, comprised of representatives from both employer and employee organizations. The commission ultimately reached a consensus in June on the two-stage increase. The SPD, currently polling below 15 percent, presented the agreement as a success, a move observers suggest was intended to bolster public perception.
Employer associations have voiced strong objections, claiming the SPD deliberately downplayed concerns raised during commission negotiations. They argue the government is prioritizing political optics over economic realities.
The cabinet’s decision formalizes the commission’s recommendations, setting the stage for the wage increases to take effect as scheduled. The debate surrounding the minimum wage is expected to continue, with businesses bracing for the impact and labour groups advocating for further improvements in worker compensation.
