So Long, 12.82 Euros: Germany's Minimum Wage Rising to 14.60 Euros by 2027 - SPD's Critique
Rise in Minimum Wage to €14.60 by 2027 Sparks Criticism from SPD Party - Wage floor to escalate to €14.60 by 2027 announced
Let's get down to business: the minimum wage in Germany is about to see a significant surge! Starting from January 1, 2022, the wage floor will step up first to 13.90 euros, and by the stroke of midnight on December 31, 2027, it'll escalate again to an impressive 14.60 euros per hour!
This much-anticipated jump will catapult Germany's minimum wage to the second-highest in the European Union, trailing only Luxembourg[1][3][4]. Federal Minister of Labor, Barbara Bas (SPD), has announced that they'll push through the recommended adjustment, even though her party had been pressing for a minimum wage of 15 euros. "We'll put the legal regulation into action and follow through with its passage," Bas boldly declared soon after the commission's consensus was announced in Berlin[5].
Now, the current minimum wage hovers at 12.82 euros. After a series of tough talks behind closed doors, the commission of employers and trade unions finally reached a unanimous decision following a mediator proposal from the commission chairwoman, Christiane Schoenefeld[5]. According to the German Trade Union Confederation (DGB), approximately six million employees will reap the benefits of this increase[5].
However, employers are voicing dissent, with Schoenefeld lambasting political meddling, which she believes contradicts the independent commission's mandate[5]. The lead negotiator for employers, Steffen Kampeter, expressed outrage over the intense pressure exerted on the commission by political parties over the past few months[5]. The industry chieftains now expect the promised economic stimuli from the pols.
"Of course, we would've preferred more for the people in this country," Bas admitted, "But it's crucial to me that there is a minimum wage increase now." Should the coalition fail to act, discussions surrounding a 15 euro minimum wage would have been on the table[5]. Criticism didn't stop there; the SPD's employee wing voiced disappointment, arguing for a flat-out, legal 15 euro minimum wage[5].
Federal Chancellor Friedrich Merz (CDU) seems to have no further bone to pick, stating, "I presume that this will not require additional discussions within the coalition." Merz neatly sidestepped potential political debates, as the coalition had agreed to implement the commission's recommendation and refrain from interfering[5].
The Minimum Wage Commission reassesses the pay floor every two years. The last decision, concerning the current minimum wage, was made against the wishes of the trade unions, with Schoenefeld casting the deciding vote[5]. The negotiations, according to Koerzell, were far from a walk in the park[5].
For years, the SPD has kept the minimum wage at the forefront of its election campaign, with Bas set to be elected as the new SPD chairwoman alongside Klingbeil in the evening of the party conference in Berlin[6]. The DGB chairwoman, Yasmin Fahimi, addressed the delegates at the beginning of the convention: "This has been a grueling struggle." While the coalition agreement of CDU, CSU, and Social Democrats had held back on a specific commitment, it described a 15 euro minimum wage in 2026 as "achievable"[6].
As usual, the critics weren't far behind. Social associations argued that a 15 euro minimum wage would have been more fitting given recent high inflation rates, while employers and the agricultural sector expressed concerns about negative economic consequences[6][7].
Blazing a trail for social welfare, the minimum wage in Germany was first introduced in 2015 under Chancellor Angela Merkel (CDU), with a subsequent increase to 12 euros in October 2022[6]. The decision on the minimum wage is based on the development of collective bargaining agreements in Germany, calculated by the Federal Statistical Office, and the median wage serves as a balancing factor, as 60 percent of the national median wage is considered an appropriate minimum wage[6].
Last year, 15.5 percent of the population was officially at risk of poverty - around 13.1 million individuals in Germany[8]. Given the EU's definition, individuals are labeled as being at risk of poverty when they have less than 60 percent of the median income of the total population[8]. Employers, nevertheless, have cautioned the potential for severe economic repercussions stemming from a substantial increase in the minimum wage[8
The decision to raise Germany's minimum wage to 14.60 euros per hour by 2027, following the consensus of a commission of employers and trade unions, is expected to impact the finance and business sectors, as well as the political landscape, due to the significant economic implications. Criticism regarding the increased wage is already emerging, with some arguing for a higher minimum wage of 15 euros, as seen in the general-news discourse surrounding this topic.
