Income: Government promotes planned minimum wage increase

Government promotes planned minimum wage increase

The statutory minimum wage in Germany is to increase to twelve euros on October 1, 2022. Photo: Fernando Gutierrez-Juarez/dpa-Zentralbild/dpa

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Inflation is higher than it has been for years – the government believes that the planned increase in the minimum wage is just the thing. According to the opposition, however, the plans are not sufficient.

Federal Minister of Labor Hubertus Heil (SPD) has promoted the planned increase in the minimum wage to 12 euros as a welfare state requirement. The step is also important in view of the current price development, said Heil at the first reading of his draft law in the Bundestag.

This prevents millions of people from losing touch with the working middle class. Anyone who works full-time for the minimum wage has so far earned around 1700 euros gross and after the increase around 2100 euros, says Heil. With the increase to 12 euros on October 1st, the coalition wants to implement an election promise made by Chancellor Olaf Scholz (SPD).

Minimum wage must reach people

The Union labor market politician Stephan Stracke (CDU) warned that the increased minimum wage must actually reach the people. To do this, the coalition must change tax law, for example by abolishing so-called cold progression. AFD MP Jürgen Pohl referred to inflation and criticized: “The highest minimum wage increase to date of 22 percent will soon be eaten up by inflation.”

Heil described the minimum wage as a successful model since its introduction. The employers, whose top representatives once again voiced harsh criticism of the legislative plans at the beginning of the week, have sufficient lead time to implement the step in October. The Green labor market expert Frank Bsirske said that Germany is currently one of the last places in the EU comparison when it comes to the minimum wage level. Bsirske and Heil announced new steps beyond the minimum wage to strengthen collective bargaining.

Next level of increase planned for 2024

On July 1, 2022, the minimum wage will increase to EUR 10.45 per hour as scheduled. The draft law justifies the planned unscheduled increase three months later with rising living and housing costs. According to the draft law, the Minimum Wage Commission should again decide on future adjustments. The next level of increase is scheduled for January 1, 2024.

The limit for mini-jobs will also be raised from 450 to 520 euros – from October 1st, monthly earnings will remain tax and social security-free up to the new limit for employees. The FDP social expert Pascal Kober pointed out this point, which is particularly important for his party. Many mini-jobbers now have the opportunity for a little more money. The limit will also be raised with future minimum wage increases.

The left labor market expert Susanne Ferschl criticized the raising of the mini-job limit: “Especially the Greens and SPD know very well that mini-jobs are a prime example of precarious employment.”


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