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German Cabinet approves wage hike, key Scholz pledge

BERLIN (AP) – Germany’s Cabinet yesterday approved raising the country’s minimum wage to EUR12 (USD13.60) per hour in October, making good on a key pledge in Chancellor Olaf Scholz’s election campaign last year.

Germany has had a national minimum wage since 2015. It was introduced at the insistence of Scholz’s centre-left Social Democrats, who at the time were junior partners in conservative Chancellor Angela Merkel’s government.

The minimum wage started off at EUR8.50 per hour, but a commission in which labour unions and employers are represented reviewed it regularly. The panel set the current level of EUR9.82 and a planned rise to EUR10.45 to take effect on July 1.

Scholz has long argued for a hike to EUR12 and made it a key plank of his campaign for Germany’s election in September, which his party won narrowly.

“Many citizens of our country work a lot but earn little – that must change,” Scholz wrote in a tweet announcing the Cabinet decision. “For me, one of the most important laws and a question of respect.” The wage increase still needs approval in parliament, where Scholz’s three-party coalition has a comfortable majority.

According to the draft legislation, some 6.2 million people in Germany currently work for less than EUR12 per hour.

After the one-time hike set for October 1, the commission would again set further changes to the minimum wage.

Employers’ associations have complained that the increase endorsed by the Cabinet violates a principle that wage levels in Germany are set by employers and employee representatives.

The proposed increase comes as inflation in Germany and elsewhere has soared. Year-on-year inflation in the country, which has Europe’s biggest economy, stood at 4.9 per cent in January.

German Chancellor Olaf Scholz. PHOTO: AP

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