[Germany] Employers concerned about potential €15 minimum wage

In Germany, employer association Gesamtmetall has issued a warning to the Social Democratic Party (SPD) regarding the proposed increase of the minimum wage to €15 per hour, The Munich Eye reports.

Oliver Zander, the association's head, stated that such a politically-mandated increase would represent a dramatic 76 per cent rise over a decade, which would outpace the growth of negotiated wage agreements.

Since the introduction of the statutory minimum wage (rising from €8.50 to €12.82), collective bargaining agreements have reportedly increased by just 29 per cent. However, Mr Zander warned that a €15 minimum wage, particularly if it were imposed during the longest economic downturn since the establishment of the Federal Republic of Germany, could lead to serious economic fallout, including significant price hikes in everyday services.

Mr Zander also highlighted the potential for increased business closures, particularly in Eastern Germany, a rise in informal employment, and a reduction in regular job opportunities.

The German Institute for Economic Research (DIW), by contrast, suggested that a €15 minimum wage would have positive impacts on the national economy. DIW President Marcel Fratzscher reportedly said that a higher minimum wage would foster increased consumer spending and stimulate economic growth.

Under the coalition agreement, a minimum wage of €15 could be attained by 2026. The minimum wage commission is expected to make its next decision regarding wage adjustments by the end of June 2025. 

Source: The Munich Eye

In Germany, employer association Gesamtmetall has issued a warning to the Social Democratic Party (SPD) regarding the proposed increase of the minimum wage to €15 per hour, The Munich Eye reports.

Oliver Zander, the association's head, stated that such a politically-mandated increase would represent a dramatic 76 per cent rise over a decade, which would outpace the growth of negotiated wage agreements.

Since the introduction of the statutory minimum wage (rising from €8.50 to €12.82), collective bargaining agreements have reportedly increased by just 29 per cent. However, Mr Zander warned that a €15 minimum wage, particularly if it were imposed during the longest economic downturn since the establishment of the Federal Republic of Germany, could lead to serious economic fallout, including significant price hikes in everyday services.

Mr Zander also highlighted the potential for increased business closures, particularly in Eastern Germany, a rise in informal employment, and a reduction in regular job opportunities.

The German Institute for Economic Research (DIW), by contrast, suggested that a €15 minimum wage would have positive impacts on the national economy. DIW President Marcel Fratzscher reportedly said that a higher minimum wage would foster increased consumer spending and stimulate economic growth.

Under the coalition agreement, a minimum wage of €15 could be attained by 2026. The minimum wage commission is expected to make its next decision regarding wage adjustments by the end of June 2025. 

Source: The Munich Eye