Minimum wage rises to 12 euros: "For many, the biggest jump in wages in their lives"

Those who work full-time and receive minimum wage will earn significantly more in the future.

Minimum wage rises to 12 euros: "For many, the biggest jump in wages in their lives"

Those who work full-time and receive minimum wage will earn significantly more in the future. Increasing personnel costs could become a problem for small companies. SPD boss Esken is already demanding that collectively agreed wages should now also increase.

The statutory minimum wage in Germany has been twelve euros an hour since Saturday, but Federal Labor Minister Hubertus Heil and economists are therefore not expecting an increase in unemployment. The higher minimum wage will "have no negative effect on the labor market from a macroeconomic point of view," Heil told the newspapers of the Funke media group. His party colleague Saskia Esken called for increases in collective wages.

The increase from €10.45 to €12 per hour is "the biggest jump in wages in many employees' lives," said Heil. This is helping "especially now in the crisis", because "those who work full-time for the minimum wage have almost 300 euros more gross per month". According to the government, more than six million employees should benefit from the increase in the minimum wage.

The head of the Institute for the Study of Labor (IZA), Simon Jäger, does not expect the new minimum wage to result in any job losses. But there will probably be "a relocation of jobs from less productive companies to more productive companies," he told the "Frankfurter Allgemeine Zeitung". Small restaurants or some kiosks could have to close.

"At the same time, more workers will then be available for other companies in other areas that can also cope with a higher wage level, for example in industry," said Jäger. In any case, reducing the comparatively large low-wage sector in Germany has clear advantages. According to studies, a particularly large number of people in eastern Germany will benefit from the minimum wage increase, as the average wage paid there has so far been less than twelve euros.

The government had decided to increase the minimum wage and not the minimum wage commission set up specifically for this purpose. Heil confirmed that this was a one-off step. "For further increases, the Minimum Wage Commission will take on its important task again."

SPD leader Esken pleaded for higher salaries in general when the minimum wage was raised. "The minimum wage is always an impetus for higher wages," she told the "Stuttgarter Zeitung" and the "Stuttgarter Nachrichten". "The unions that are now entering into collective bargaining disputes should make it clear that agreements must reflect the rate of inflation."

The Confederation of German Trade Unions (DGB) calculated that the household income of minimum-wage earners will be significantly higher than that of recipients of the future basic income. In the case of a childless couple who work 28.5 hours a week for the minimum wage, the difference to the citizen's income is 832 euros, as reported by the editorial network Germany (RND) with reference to the DGB.

"The assertion that nobody would still go to work with higher standard rates comes from the realm of fairy tales and legends," said DGB board member Anja Piel. The citizens' allowance planned by the traffic light coalition is to replace the previous Hartz IV system from January.

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