Germany Minimum Wage Approved By Parliament

Germany will now have a minimum wage as of 2015. The new minimum wage was approved by Germany’s Parliament and will be set at €8.50, or $11.61 USD per hour. Germany’s first minimum wage law has not been a smooth passing as German trade unions have complained that the law has many loopholes and could potentially be a job killer.

The new minimum wage law in Germany will be enacted in 2015, however some job sectors have a two year transition period.

This landmark vote on Germany’s minimum wage will be a major change for German employees as their current rates of pay had been based on sector-wide agreements as the government of Germany sits on the sidelines and watches. Germany was just one of seven major countries in the European Union to not have a minimum wage and Germany is the EU’s largest economy.

Those who crafted the Germany minimum wage bill did so with as little political influence as possible and wish to keep politics out of the discussion for the future as well. The €8.50 figure was and will be set by an independent commission of trade union and business representatives.

The new minimum wage in Germany is seen as a major win for Chancellor Angela Merkel and her representing party, the Social Democratic Party. Before last year’s elections, Chancellor Merkel’s platform included a minimum wage that Germany would share as a whole. The new law will enhance the paychecks of roughly 3.7 million German employees and has had overwhelming support from the German people.

Last minute amendments to the German minimum wage law has caused concern among those early supporters of the bill. Those in favor of a nationwide minimum wage worry that some of these amendments can hollow out the law in due time.

One such change include exemptions for employees who would be at risk of being priced out of the labor market by an excessive pay rise. The verbage, modified by conservative lawmakers, states that interns, seasonal workers and other groups will not immediately benefit from the new wage floor. The fear outlined by conservatives is that these lower wage employees may find themselves out of work by a sharp rise in wage.

Even though individual companies seem relaxed about the new Germany minimum wage, lobbyists and German economists warn that the minimum wage law in Germany could push prices up for consumers and Germany can see a loss of hundreds of thousands of jobs, especially those unskilled jobs or jobs in economically weak regions such as eastern Germany. One such economic institute estimates that Germany can lose up to 900,000 jobs, many of which are part time.

Outside Germany, the law has won appraise from economists who deduce that Germany’s minimum wage law could boost consumer demand, which had be fledgling in the export-oriented German economy.

Meanwhile in the United States, employees still fight for a higher minimum wage by staging protests across the country. President Obama has blamed Congress for not acting on a national social need such as minimum wage and other issues. Perhaps the US can look overseas to Germany for a blueprint for minimum wage.