Germany: €12 per hour for the minimum wage alongside call for ‘concerted action’ to fight inflation

The week ending Friday 03 June concluded on a contradictory note as the Bundestag officially approved an increase in the minimum salary level and by doing so held good an election campaign promise made by Chancellor Olaf Scholz (c.f. article No.12846). The universal minimum salary that was established in 2015 is set to rise from January’s level of €9.82 gross per hour to €10.45 per hour on 01 July and then will thus rise again to €12 on 01 October. At the same time, the monthly limit for mini-job earnings (15 hours/week max) will rise from €450 to €520. Nearly 6 million people will be impacted by the change. In terms of the minimum monthly income equivalent, the increase will raise the gross minimum monthly salary of €1,700 to €2,100. The Bundestag vote, considered historic, has been most harshly criticized by the conservative opposition and by employers, who lament the State’s intervention in the area of salary negotiations; traditionally the preserve of the social partners. Paradoxically, however, these were the same voices that agreed with Chancellor Scholz’s call on 02 June, the day prior to the vote, for a meeting of the social partners to try to develop ‘concerted action’ to fight inflation. Mr. Scholz did not mention wages, but it is clear that wage moderation will be discussed, even though the major metal and chemical industries will be negotiating their salary levels this autumn. “We need to discuss with IG Metall how we can bring the issue of wage costs under control,” confirmed Stefan Wolf, President of the metallurgy sector’s employers’ association Gesamtmetall. Unofficial reactions from the trade unions show that the prospect of moderating wage demands with current inflation above 8% is seen as being completely illusory.