Minimum wage: There is more money in these jobs

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Employers reject political minimum wage increase to 12 euros

The increase is politically controversial. Employers’ associations complain about a massive intervention in collective bargaining autonomy. Rainer DulgerPresident of the Confederation of German Employers (BDA), warned last year in an interview with our editors that the increase would interfere with more than 190 collective agreements and make more than 570 collectively negotiated wage groups superfluous.

Employers are currently pushing for a transitional period in the planned law – when the minimum wage was introduced in 2015 at EUR 8.50, employers had two years to implement the requirement.

Employees in retail and hospitality would have more money

A similar transitional period would make the political intervention almost superfluous. Because the minimum wage is regularly adjusted. At the beginning of the year, it rose by 22 cents from EUR 9.60 9.82 euros per houron July 1 it will be raised to EUR 10.45 as planned.

If the SPD, Greens and FDP stick to their plan to raise the minimum wage to 12 euros from October, that would mean a wage increase of 15 percent compared to July and even 22.2 percent compared to the current value.

Retail and hospitality workers would benefit

While employees have more money in their wallets, companies face higher wage costs. Retail is particularly affected. According to data from the Federal Statistical Office, 1.27 million employees in retail would benefit from an increase in the minimum wage.

With around 660,000 employees, the proportion in the catering and hotel industry who would have more money in their pockets is also high – almost two thirds of those employed in the industry would thus benefit. Because the hospitality industry is particularly dependent on mini-jobbers and part-time employees – the two types of employment account for more than three quarters of all employees who benefit from a higher minimum wage.

In production, 800,000 employees would receive more money

According to data from the Wiesbaden authority, more than half a million people who work in health and social care would also benefit. Around 113,000 employees would have more money in the education and training sectors, and around 115,000 employees in the arts, entertainment and recreation sectors.

Employees in the manufacturing industry would also benefit, for example in waste disposal, mining, the construction industry or in the manufacturing industry, which include the textile industry, the food industry or the furniture industry. Almost 800,000 employees in production would have more money at their disposal with a minimum wage of 12 euros.

“The 12 euros will lead to significant improvements, especially in the systemically important sectors, in trade, in health and social services, in the forwarding and storage trade and in the catering trade,” said DGB board member Stefan Körzell our editorial team.

Will the minimum wage commission be torpedoed?

Körzell is a member of the Minimum Wage Commission, which decides on the regular adjustment of the statutory minimum wage.

The commission consists of three representatives each from the employee and employer side as well as the economists Lars Feldformer head of the so-called economic experts and recently advisor to Federal Finance Minister Christian Lindner (FDP), and Claudia Weinkopf, deputy director of the Institute for Work and Qualification (IAQ) together with two scientific representatives. Jan Ziliuswho was formerly both manager and union representative, chairs the commission.

The political intervention is torpedoing the work of the Commission and making it superfluous, criticize employers’ associations. The minimum wage was set too low when it was introduced in 2015, making the increase necessary, worker representatives counter. “Especially where there is no collective bargaining protection because employers refuse to negotiate collectively, we need the 12 euro as the lowest stop line,” said Körzell.

DGB hopes for a boost for the economy

The trade unionist hopes that the wage increase will also have a positive impact on the economy as a whole. According to Körzell, purchasing power would be increased by around 4.8 billion euros per year, other calculations even assume 9.8 billion euros.

“In times of pandemic-related economic slumps, this is an important pillar of the economy, because a large part of the additional income will flow back directly into the economic cycle.” The higher minimum wage would also make it affordable and protect social security, said Körzell.

There should also be more money in other jobs

But not only in the jobs where less than 12 euros are currently paid, there should be more money in the future. Many workers currently earning around €12 will also demand higher wages as those who previously earn little catch up on wages.

The higher costs will probably be passed on to products, as the bakers have already announced. In the short term, this could fuel inflation further, but most economists do not expect higher inflation in the medium and long term due to the higher minimum wage.

The minimum wage is currently higher in six European countries

With the planned increase, Germany would become the country with the second highest minimum wage in the European Union. This is the result of a study by the Economic and Social Science Institute (WSI) of the Hans Böckler Foundation, which is close to the trade union.

While the legal minimum wage in Bulgaria is only EUR 2.00 per hour, it is EUR 13.05 in Luxembourg. In the Netherlands (EUR 10.58), France (EUR 10.57), Ireland (EUR 10.50) and Belgium (EUR 10.25), the statutory minimum wage is currently higher than in Germany. With the increase to 12 euros, Germany would have the second highest minimum wage in the EU after Luxembourg.

In the other German neighboring countries Denmark, Austria and Switzerland there is no statutory minimum wage. In Poland (3.81 euros) and the Czech Republic (3.76 euros) it is well below the German minimum wage. According to the WSI, the minimum wage in Germany is currently 50.7 percent compared to the national wage level. The researchers recommend a level of at least 60 percent as appropriate, as is the case in New Zealand, Korea and France, for example.

Updated: Sat, 02/19/2022, 10:00 p.m

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