Minimum wages are expected to rise to EUR 10.45 by 2022

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Actually it should have been a bigger appearance: On Tuesday afternoon, employers and unions wanted to announce with the chairman of the independent minimum wage commission which lower wage limit will apply in Germany from next year. But then the appointment was canceled at short notice – and the question arose as to whether the Commission might not agree.

But that was not the case, only negotiations had to take a little longer than planned. In the late afternoon, the panel’s recommendation leaked. According to this, the minimum wage should increase from currently 9.35 euros per hour to 9.50 euros by January 1, 2021 and then in three further steps to 10.45 euros by July 1, 2022.

Previously, employers and unions had different views on the appropriate minimum wage. The latter are actually intended to raise the lower limit significantly more than in the past. In view of the tense economic situation caused by the corona crisis, on the other hand, employers naturally have little interest in major leaps.

The way in which the minimum wage is adjusted in regular steps is actually heavily regulated. The commission, which has three employer and employee representatives with voting rights plus two non-voting experts and a chairman, is fundamentally based on the development of wages. As part of an overall assessment, the Commission must also examine which minimum wage level offers adequate minimum protection for employees, enables fair conditions of competition and does not endanger employment.

Started five years ago at 8.50 euros

Most recently, the Commission had decided in 2018 that the minimum wage should rise to € 9.19 in 2019 and € 9.35 in 2020. The latter was higher than the previous wage trend would have suggested; however, the Commission decided to take into account the collective bargaining agreement at that time in the civil service. This trick, however, means that the starting point for the current increase was not 9.25 euros, but only 9.29 euros, otherwise the wage increase in public service would have counted twice.

In order for the minimum wage to come into force, a regulation by the federal government is necessary. But this is based on the Commission’s recommendation.

The minimum wage was introduced on January 1, 2015, at that time at 8.50 euros per hour. The fears that this would increase unemployment in structurally weak areas have not been met. However, some experts fear that such an effect could occur if the lower wage limit were to be raised significantly, for example to twelve euros, as the DGB actually requires – and the SPD “in perspective”.

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The minimum wage also applies to catering.

This is recommended by the responsible commission of the federal government. There are four stages.

Henrike Roßbach, Berlin

Actually it should have been a bigger appearance: On Tuesday afternoon, employers and unions wanted to announce with the chairman of the independent minimum wage commission which lower wage limit will apply in Germany from next year. But then the appointment was canceled at short notice – and the question arose as to whether the Commission might not agree.

But that was not the case, only negotiations had to take a little longer than planned. In the late afternoon, the panel’s recommendation leaked. According to this, the minimum wage should increase from currently 9.35 euros per hour to 9.50 euros by January 1, 2021 and then in three further steps to 10.45 euros by July 1, 2022.

Previously, employers and unions had different views on the appropriate minimum wage. The latter are actually intended to raise the lower limit significantly more than in the past. In view of the tense economic situation caused by the corona crisis, on the other hand, employers naturally have little interest in major leaps.

The way in which the minimum wage is adjusted in regular steps is actually heavily regulated. The commission, which has three employer and employee representatives with voting rights plus two non-voting experts and a chairman, is fundamentally based on the development of wages. As part of an overall assessment, the Commission must also examine which minimum wage level offers adequate minimum protection for employees, enables fair conditions of competition and does not endanger employment.

Most recently, the Commission had decided in 2018 that the minimum wage should rise to € 9.19 in 2019 and € 9.35 in 2020. The latter was higher than the previous wage trend would have suggested; however, the Commission decided to take into account the collective bargaining agreement at that time in the civil service. This trick, however, means that the starting point for the current increase was not 9.25 euros, but only 9.29 euros, otherwise the wage increase in public service would have counted twice.

In order for the minimum wage to come into force, a regulation by the federal government is necessary. But this is based on the Commission’s recommendation.

The minimum wage was introduced on January 1, 2015, at that time at 8.50 euros per hour. The fears that this would increase unemployment in structurally weak areas have not been met. However, some experts fear that such an effect could occur if the lower wage limit were to be raised significantly, for example to twelve euros, as the DGB actually requires – and the SPD “in perspective”.

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