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Local Germany
15-04-2025
- Business
- Local Germany
Is Germany set for a €15 an hour minimum wage?
To their credit, negotiators from the CDU/CSU and the SPD have produced a coalition agreement far more quickly than many of their predecessors. The relative rush, however, seems to have produced more than the usual amount of ambiguity. On immigration, for example, there are significant differences in the way the two parties are interpreting the word "alignment" – as in, the new government will deny asylum seekers entry at Germany's border "in alignment with our European neighbours". READ ALSO: What Germany's new coalition pact means for foreign residents In addition, Lars Klingbeil, leader of the centre-left SPD, has admitted that many of the projects outlined in the agreement haven't been costed (the words "we want to" – as in "we want to remain an industrial country and achieve net zero" – appear 150 times in the 146-page document). That means that many of the projects on the parties' wish list will, in fact, be subject to funding. €15 per hour - a firm commitment or a 'shared assumption'? The two parties are also offering significantly different interpretations of their shared 'commitment' to raise Germany's minimum wage ( Mindestlohn ) to €15 per hour (from the current rate of €12.82) in 2026. "For the further development of the minimum wage, the Minimum Wage Commission will take both the development of collective agreements and 60 percent of the gross median wage of full-time employees into account in an overall assessment," the coalition pact states. "In this way, a minimum wage of €15 is achievable by 2026." Advertisement Following the publication of the agreement, however, CDU leader Friedrich Merz told Bild am Sonntag that the increase wasn't certain, arguing that Germany's Minimum Wage Commission is able to set the rate independently. His agreement with the SPD, he added, amounted to a shared assumption "that the Commission is thinking in this direction." In response, Labour Minister Hubertus Heil (SPD) was quick to appear on ZDF's Morgenmagazin , where he argued that if the Minimum Wage Commission adheres to its own rules of procedure, a minimum hourly wage of €15 in 2026 was achievable. "People on lower and middle incomes should be supported," he said. READ ALSO: How Germany's new coalition will affect your bank balance So, can Germany look forward to a minimum wage of €15 per hour next year? Nominally, Merz and Heil are arguing about whether they think the Minimum Wage Commission's interpretation of a range of economic data points will produce a recommendation of €15 per hour. Advertisement In practice, members of the commission will find it difficult to interpret this data without reference to statements made by senior members of the government. Merz's contribution to the debate has already prompted the youth wing of the party - nicknamed the Jusos , or young socialists - to recommend their members vote against accepting the current pact. Speaking on n-tv, Jusos chairman Philipp Türmer called Merz's comments "a gross foul". He and many of the young social democrats he represents are also angry about the planned abolition of a (maximum) eight-hour working day and further weakening of Germany's welfare system. Philipp Türmer, chairman of the SPD 'Jusos' youth wing, speaks at the party conference in Berlin. Photo: picture alliance/dpa | Michael Kappeler Despite the power of the Jusos , which accounts for roughly 20 percent of SPD membership, it remains likely that a majority of members will vote in support of the coalition agreement between now and April 29th. Once the agreement is ratified and Merz installed as Chancellor on May 6th , all eyes will turn to the Minimum Wage Commission. Germany's new federal government will almost certainly implement the commission's recommendation. The minimum wage will go up, therefore, but possibly not by as much as the SPD hopes. Merz's comments suggest the conservative leader is hoping for a recommendation of less than €15 per hour. READ ALSO: The jobs and skills growing in demand across Germany How is Germany's minimum wage calculated? Germany only introduced a nationwide statutory minimum wage in 2015. At the same time, the government set up the Minimum Wage Commission ( Mindestlohnausschuss ) to recommend adjustments to the Mindestlohn based on the economic situation, the employment market, and the effects of previous minimum wage adjustments. The Minimum Wage Commission is made up of various individual experts, as well as representatives from trade unions and employers' associations. Based on its recommendations, the minimum wage in Germany has been adjusted several times since it was introduced. Advertisement Since it was founded, the commission has only been sidelined by the government one time. Back in October 2022, a year after winning the federal elections, Olaf Scholz's SPD used his majority in parliament to hike up the minimum wage to €12 per hour. Since then, however, the commission has been back in control and is charged with making recommendations based on clearly specified criteria. The federal government then decides on whether or not to implement the recommendation. but isn't able to decide on a different amount. If the government decides against implementing the recommendation, the current minimum wage level will remain in place.
South China Morning Post
04-03-2025
- Business
- South China Morning Post
Hong Kong minimum wage rise to benefit working poor
A rise of HK$2.10 (US$0.30) in the hourly wage may seem shameful in affluent Hong Kong. But for the tens of thousands of the lowest paid workers, the proposed increase in the statutory minimum wage is to be welcomed. That is good news for the city's so-called working poor, such as cleaners and security guards. Advertisement The new wage floor will rise by 5.25 per cent to HK$42.10, the first increase since a new formula for adjustment was passed last year. It will come into effect on May 1, Labour Day, subject to approval by the Legislative Council. The mechanism is linked to the consumer price index and economic growth, which is seen as a better way to ensure low-income employees can share the city's economic fortunes and guard against erosion of their standard of living caused by inflation. If the immediate response from business appears to be mild, it is because of the relatively moderate impact on the economy. It is estimated that the number of workers earning hourly wages below the new rate is around 22,100 to 36,700, representing about 0.8 per cent to 1.3 per cent of all employees. The actual number of beneficiaries, however, is likely to be greater because companies are at the same time expected to adjust wages of those at higher levels to maintain wage differentials. Advertisement According to the Minimum Wage Commission, sectors with most low-paying jobs are set to fork out an additional HK$170 million to HK$230 million, representing about 0.12 per cent to 0.15 per cent of their total wage bills.
South China Morning Post
18-02-2025
- Business
- South China Morning Post
Hong Kong's minimum wage to increase by 5.25% from HK$40 to HK$42.1 per hour
Hong Kong's lowest paid workers will get HK$2.1 (27 US cents) more in their hourly salary, from the current HK$40 to HK$42.1, under a recommendation adopted by the government's key decision-making Executive Council. The government announced on Tuesday that the Exco had accepted the recommendation of the Minimum Wage Commission to raise the statutory minimum wage by 5.25 per cent, the first rise after a new formula for the rate adjustment was passed last year. The revised minimum wage proposal will be presented to the Legislative Council on Wednesday next week. Subject to Legco's approval, the revised rate will come into effect on May 1. 'The [commission] believes that the new statutory minimum wage rate can maintain an appropriate balance between forestalling excessively low wages and minimising the loss of low-paid jobs, while giving due regard to sustaining Hong Kong's economic growth and competitiveness,' commission chairwoman Priscilla Wong Pui-sze said. Because of the rise in the minimum wage, the monthly monetary cap on the requirement for employers to record employees' working hours will also be raised, from HK$16,300 per month to HK$17,200. Employers will not need to record the working hours of their employees unless their monthly salary was below the threshold.
