The proposal by the Minimum Wage Commission had been awaited for a long time, but now it is certain: the minimum wage is to rise to EUR 12.41 on January 1, 2024 and to EUR 12.82 a year later. This corresponds to a percentage increase of 3.4 percent in the first year and 3.3 percent in the second year.
The commission, which includes three representatives of employers and employees and two economists, passed its decision against the votes of the union representatives.
This was preceded by an emotional debate that lasted months. New demands for an increase made the headlines on a weekly basis, and the number 14 kept popping up. The demands were made in particular by parts of the SPD, the Greens and the Left Party, as well as the trade unions and social organizations.
The reaction of Federal Labor Minister Hubertus Heil (SPD) to the now official proposal is remarkable. In April he said he expected a “significant increase”. However, the upward adjustment is not “significant” either compared to previous increases or relative to inflation.
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Heil declared himself before the press on Monday. He was curt about it. He dodged the question of whether he considered the increase to be appropriate in view of the rise in prices, with reference to the planned strengthening of collective bargaining coverage by law and the sharp increases in the minimum wage in recent years.
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For those who would have wished for more, the disappointment is great – and turns to anger. At 10 a.m., the news agencies reported the Commission’s proposal. As early as 10:07 a.m., the German Trade Union Confederation (DGB) announced in a press release: “Today the Minimum Wage Commission made an absolutely unsatisfactory decision against the votes of the unions.”
“There was no way we could lend a hand for an adjustment in the cent range,” said DGB board member Stefan Körzell.
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What then followed is nothing more than a declaration of war. The DGB posted a photo on Twitter showing Körzell with his arms demonstratively crossed. The message is unmistakable: “Not with us!” is written in capital letters above Körzell’s head.
“It is also completely ludicrous that the employers are not using the minimum wage of 12 euros currently set by the legislature as the basis for the next increase,” says Körzell. The resolution that has now been passed is based on the old minimum wage of EUR 10.45. “This is tantamount to disregarding the legislator, who set the 12 euros before the surge in inflation to make the minimum wage poverty-proof.”
When asked, Minister Heil said: “That cannot be inferred from the report. I can only say that the report has complied with the law.”
“With today’s decision, the Commission has proven that it cannot be politicized,” Gitta Connemann, head of the SME Union, told WELT. “It is up to them to decide what level of minimum wage is appropriate. It is also their job not to jeopardize employment. Therefore, it is unfair to claim that the Commission does not take into account the minimum protection for workers.” The current proposal ends the “outbidding competition between social organizations and trade unions”, according to Connemann.
Even the current 12 euros were not enough for many recently
The linchpin of the increase is inflation. In October 2022, when the minimum wage was raised to 12 euros, the inflation rate was a record 8.8 percent. “The 12 euros were our central demand in the election campaign – but they are actually already outdated,” said one who sits for the SPD in the Bundestag at the time in the background discussion. Even with the increase to 12 euros, a further increase was actually necessary.
On the one hand, this is surprising – after all, the percentage increase in the minimum wage in recent years has been immense. Within eight years, the minimum wage has risen from 8.50 to 12 euros, which corresponds to an increase of around 40 percent.
On the other hand, economists like Marcel Fratzscher emphasize that inflation hits people with low wages much harder because they have to spend a much higher proportion of their income on daily needs. “In order to achieve minimum protection and to compensate for inflation, the minimum wage should have risen to at least 13.50 euros,” says trade unionist Körzell.
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In any case, the ranks of the trade unions do not want to come to terms with the proposal. “The fact that the employers’ camp completely ignores the increase to 12 euros decided by the German Bundestag in its calculations is a real scandal,” criticizes Guido Zeitler, chairman of the Food, Enjoyment and Restaurants Union (NGG) and speaks of a “shame”.
Thorsten Schulten, economist at the union-affiliated Hans Böckler Foundation, also speaks of an “absolute scandal” and adds: “Here, a reform of the minimum wage law urgently needs to be considered.”
Criticism is also being voiced in the ranks of the traffic light government – coupled with announcements that the proposal will be ignored. “We should push for an adjustment,” said SPD member of the Bundestag Sebastian Roloff to “Media Pioneer”. And Beate Müller-Gemmeke (Greens) demands “that the criteria for the adjustment must be tightened”.
Heil, however, rejected these advances. “The Federal Government will implement the Commission’s recommendation by ordinance. That’s what the law says,” he said at the press conference. “The alternative would be no increase in the minimum wage.”
What Heil didn’t mention: there was another alternative that would be politically highly explosive: the dissolution of the minimum wage commission.
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For Heil it is a tightrope walk. As a minister, he has to respect the law, even if he doesn’t like the proposal – which is obvious. That’s why he deliberately chooses his words passively: “I can understand that some wished for more,” he said. At the same time, he has to deal with the wrath of the unions. In any case, Heil did not allow himself to be persuaded to make a clear statement on Monday that the increase was too low.
He may also have in mind that the European minimum wage directive could become binding at the end of 2024. She recommends that the minimum wage should not be less than 60 percent of the median wage. According to the unions, in order to reach this 60 percent threshold, the minimum wage in Germany would have to be raised to 13.50 euros per hour. “The minimum wage will continue to develop in the future,” said Heil, somewhat vaguely.
If the directive were to be implemented, he could then, before the next federal election, take up the cause of the fact that under him as minister, a “significant increase” had once again been achieved.
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