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Why the minimum wage is to be increased to 12 euros this year

12 euros per hour of work – the minimum wage was one of the central promises in the election campaign of the SPD and Olaf Scholz. Now the minimum wage increase should come: We explain which employees will benefit from it and why employers criticize the plans.

    12 euros per hour of work – the minimum wage was one of the central promises in the election campaign of the SPD and Olaf Scholz. Now the minimum wage increase is to come: We explain which employees will benefit from it and why employers criticize the plans.

It's actually only about 1.55 euros – but it's also about the principle and a big promise of justice by the government. "One of the most important actions of my first year in office will be raising the minimum wage to 12 euros," emphasized Chancellor Olaf Scholz in an interview with our editorial team during the election campaign last year.

This Wednesday, the federal cabinet wants to give the green light for the planned increase in the minimum wage on October 1 from 10.45 to 12 euros. The most important questions and answers about the project:

What is the situation with the minimum wage in Germany?

In 2015, the statutory lower wage limit was introduced at EUR 8.50 gross per hour. According to the Minimum Wage Act, the Minimum Wage Commission, in which trade unions and employers are represented, decides on the development of the minimum wage. The steps will then become binding by statutory order. Several levels followed after 2015: EUR 8.84, EUR 9.19, EUR 9.35, EUR 9.50, EUR 9.60 and, since January 1, EUR 9.82. An adjustment to EUR 10.45 is planned for July 1, 2022. In addition to the statutory minimum wage, which basically applies to all sectors and regions, there are sector-specific minimum wages.

Why should now come 12 euros?

Labor Minister Heil's draft law states that a "cautious start" was deliberately chosen in 2015 and that the minimum wage is below average, even in a European comparison. Above all, he refers to the Basic Law: One of the elementary requirements for justice is that one should be able to make a living with a full-time job without being dependent on social benefits. Even in the low-wage sector, full-time employment must also enable "appropriate participation" in social life. Rising living and housing costs called into question whether the current minimum wage was suitable for this. A full-time job at the minimum wage is not enough for a poverty-avoiding old-age pension either.

Why should the previous increase procedure be bypassed?

Trade unionists like former Verdi boss Frank Bsirske have been criticizing for years that the minimum wage in Germany was too low from the start "to make a living on it" – and are calling for a one-time increase beyond the usual levels. Because the Minimum Wage Commission is not free in its recommendations, but is based on the previous collective bargaining development in Germany.

Who should benefit from the €12 minimum wage?

According to the draft law, 6.2 million employees will receive an hourly wage of less than 12 euros. According to this, around 111,000 are dependent on basic security despite full-time employment. With the 12 euros, the claim is met that you can get 60 percent of the average gross wage with your work. Employees are then usually better off than recipients of state benefits.

What's next for the minimum wage?

According to the government plans, the Minimum Wage Commission will continue to decide on future adjustments. Your next decision should be on June 30, 2023 – for the increase level January 1, 2024.

Why are employers dissatisfied with the draft law?

According to their own statements, it is about the principle. The chief executive of the employers' association BDA, Steffen Kampeter, said at the beginning of the week "that a state wage is an attack on the basic principles of our economic and working order". BDA President Rainer Dulger had already said at the turn of the year: "The way the federal government intends at the moment, I consider it a gross violation of collective bargaining autonomy."

What exactly do employers criticize and demand?

The BDA doubts that the Minimum Wage Commission can really continue independently after the increase. Accordingly, the constitutional lawyer Frank Schorkopf, who wrote an expert opinion on behalf of the BDA, predicted repercussions on the future determination of the minimum wage by the commission. The employers in the commission now know that "the big hand can come from above", i.e. from the legislature, and that the procedure in the minimum wage commission can be overturned. Specifically, the employers are demanding that the planned increase come into force later, transitional periods and respect for existing collective agreements. © dpa

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