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Munich (German news agency) – Before the Minimum Wage Commission’s proposal to adjust the lower wage limit was announced, the Munich Ifo Institute advocated moderation. “Basically, the minimum wage commission has the task of orienting its recommendation for the increase to how collective wages are developing overall,” said Ifo boss Clemens Fuest to the newspapers of the Funke media group (Sunday editions).
“Policy 2022 overturned this rule and increased the minimum wage to 12 euros.” In 2022, the minimum wage was increased by more than 22 percent. “I would suggest returning to the original regulation for the update from 2023 and basing the increase on the increase in the collective wage index since the last minimum wage increase.” The Minimum Wage Commission, made up of employer and employee representatives, will present its proposal for the new level of the statutory minimum wage in Berlin on Monday. “In the first quarter of 2023, collective wages were almost three percent higher than a year earlier, and the increase could be somewhat higher by October,” said Fuest. “The point of this rule is that the minimum wage should follow the general wage agreement, but should not determine wage development.” The German Institute for Economic Research (DIW) recommends a minimum wage of 14 euros – provided that the collective agreement with a wage increase of 16 percent for low-income earners in the public sector is taken as a basis. “An increase in the minimum wage to 14 euros would have positive effects on the economy as a whole,” DIW President Marcel Fratzscher told the Funke newspapers. In this way, the purchasing power of many people will be supported, which will stimulate demand and contribute to the economic upswing.
A significantly higher minimum wage could also provide an incentive for some to work more. “In addition, a significantly higher minimum wage would help to reduce the low-wage area in Germany, which is unusually large by international comparison, and thus also relieve the burden on the welfare state,” said the DIW President. The German Social Association (SoVD) calls for the high inflation to be taken into account when deciding on the minimum wage. To compensate for the price increases, the minimum wage must rise to 14.13 euros, said SoVD CEO Michaela Engelmeier to the newspapers of the Funke media group (Sunday editions). “From our point of view, it would also be necessary to shorten the adjustment from two years to one year. Otherwise, the legislature would have to intervene again due to the persistently high inflation.” Left parliamentary group leader Amira Mohamed Ali spoke out in favor of a minimum wage of at least 13.53 euros. “Wages have to rise more sharply overall, but above all the minimum wage. Employees with low wages are particularly affected by inflation because they have to spend most of their income to make ends meet,” Mohamed Ali told the Funke newspapers. “Wages must increase more overall, but above all the minimum wage.” The left-wing politician also called for the minimum wage to be adjusted annually.
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