Heil defends higher minimum wage – Ifo boss warns of acceleration of inflation
“Many companies are already saying that we have to produce less”
Because of the sharp increase in electricity and gas prices, many companies are threatened with insolvency. But WELT reporter Marie Droste uses concrete examples to explain that these are not the only reasons for a possible wave of bankruptcies.
“Anyone who works full-time for the minimum wage has almost 300 euros more gross per month”: Federal Labor Minister Heil (SPD) rejects criticism of the minimum wage increase. He doesn’t expect any job losses either. However, an economist warns of negative consequences.
BFederal Labor Minister Hubertus Heil (SPD) has defended the minimum wage increase against criticism. “We decided on the 12 euros before the crisis,” Heil told the newspapers of the Funke media group (Saturday). “But they are helping right now in the crisis.” For many employees, this is the biggest jump in wages in their lives. Who full-time to minimum wage work, have almost 300 euros more gross per month due to the increase.
According to Heil, the new minimum wage will not lead to major job losses either: “I say that the higher minimum wage has no negative effect on the labor market from a macroeconomic point of view.” The labor market development is neutral and the economic effect is positive. The fact that people who earn little can now afford more is also “a question of respect and fairness,” said Heil.
At the same time, the SPD politician said that no further political intervention in the development of the minimum wage was planned. “For further increases, the Minimum Wage Commission will take on its important task again.”
From this Saturday, the statutory minimum wage will rise to twelve euros per hour. The traffic light coalition is implementing an election promise with the one-time increase decided by the Bundestag. Most recently, the lower wage limit was 10.45 euros per hour.
According to Heil, more than six million people are getting more money, especially women and East German workers. At the same time, the earnings limit for mini-jobs will be raised from 450 to 520 euros. Employers criticized the government’s intervention in wage structures.
Ifo boss: Accelerated inflation due to higher minimum wage
Economic researcher Clemens Fuest warned of a further increase in inflation as a result of raising the statutory minimum wage to twelve euros. “Insofar as the minimum wage increases the income of vulnerable groups in the lowest income bracket, it is helpful,” said the President of the Ifo Institute for Economic Research of the Düsseldorf “Rheinische Post” (Saturday). However, it is a particular burden for small companies, which are already suffering from rising energy prices. “They will pass on the higher wages through higher prices as far as possible, which will increase inflation.”
The nominal minimum wage will rise by around 15 percent, said Fuest. Due to the current inflation trend, the real wage increase due to the minimum wage increase is reduced to five percent. The purchasing power effect is correspondingly limited.
The Ifo boss also criticized the federal government’s procedure for the planned EUR 200 billion gas price cap. Money can also do a lot of damage, he said. The greatest danger is that the aid will increase the demand for energy: “If more money is released on a limited amount of gas, it will only drive up gas consumption and prices,” explained Fuest. He called on the federal government to provide more energy saving incentives and to focus more on flat-rate aid on low-income earners and companies that are badly affected.
The SPD party leader Saskia Esken pleaded for significant increases in standard wages in the fight against the energy price crisis. “The minimum wage is always an impetus for higher collective wages – that is particularly important at the moment,” said Esken of the “Stuttgarter Zeitung” and the “Stuttgarter Nachrichten” (Saturday). “The trade unions, which are now entering into collective bargaining disputes, should make it clear that agreements must reflect the rate of inflation.”