German government announces ‘significant’ increase in minimum wage

This Sunday, the German government said there would be a “significant” increase in the interprofessional minimum wage in January, which currently stands at €12 an hour, due to inflation and an increase negotiated in collective agreements.

“Not only will we continue to have high inflation, but the expected increase in collective bargaining will be reflected in the minimum wage,” Labor Minister Hubertus Heil told the Bild daily on Sunday.

The Consumer Price Index (CPI) peaked last October at 10.4% over the same period, and after stabilizing in recent months, it stood at 7.4% in March.

According to estimates by the country’s main economic institutions, annual inflation will drop to 6%, which is a high level anyway.

An interprofessional minimum wage was introduced in Germany in 2015 with the support of the Social Democratic Party (SPD), which at the time was the government’s grand coalition partner led by conservative Chancellor Angela Merkel (CDU).

It was set at 8.5 euros per hour, which was considered a milestone in a country where no such regulation existed before.

Since then, it has undergone successive increases, the last of which was carried out in October 2022 and, by the agreed decision of the Social Democrats, the Greens and the Liberals, reached the current 12 euros per hour.

The next increase, which will be determined by a commission specially created for this purpose, will be introduced in June and will take effect from January 1, 2024.

Trade unions have demanded an increase to 14 euros, and employers consider this demand “unrealistic”.

The SPD’s Heil also announced rules on the working conditions of couriers, which will stipulate, among other things, that they must not carry more than 20 kg.

“Parcels weighing more than 20 kg must be delivered by two people,” the minister said, recalling the physical damage resulting from the current conditions in which the couriers work.