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Minimum wage – for the first time more than 10 euros – economy

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The minimum wage increases in four steps to 10.45 euros.

Actually, it should have been a bigger appearance: on Tuesday afternoon, employers and unions wanted to announce their recommendation for the next increase in the minimum wage limit with the chairman of the independent minimum wage commission. 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 early evening, the committee then announced that the minimum wage should rise from currently 9.35 euros per hour to 9.50 euros by January 1, 2021, then to July 9, 2021 to EUR 9.60 and by January 1, 2022 to EUR 9.82 and finally to EUR 10.45 by July 1, 2022. The decision was made unanimously. Federal Minister of Labor Hubertus Heil (SPD) said that he would propose to the government to make the recommendation binding by means of an ordinance. In addition, he announced that in autumn, after the upcoming evaluation of the minimum wage, “proposals for further development”. “Because the minimum wage is good, but it can get even better.”

“In the next two years alone, the minimum wage increases bring a total of almost two billion euros more in the wallet of employees,” said Stefan Körzell, board member of the German Trade Union Confederation. It was clear, however, that the minimum wage could only be “a lower stop line”, he emphasized, and called for a strengthening of wage agreements. Steffen Kampeter, chief executive of the employers’ associations, spoke of an “unprecedented economic recession” with regard to the Corona crisis and said: “Due to the lower staggered adjustment steps for 2021, we will create more air, especially for small and medium-sized companies”, which should are currently struggling for their existence. The Commission’s decision shows “how well social partnership can work in Germany”.

With regard to the Corona crisis, the committee’s decision states that the decision was made “in a time of great uncertainty” this year. Indeed, employers and unions’ views on minimum wages have recently diverged. The latter want, just like the SPD, actually twelve euros in perspective, the former have little interest in big leaps also in view of the tense economic situation.

As a rule, the commission, which has three employer and employee representatives with voting rights plus two non-voting experts and one chairman, is guided by the development of wages. As part of an overall assessment, it must also examine which minimum wage level offers adequate minimum protection for employees, enable fair conditions of competition – and do not endanger employment.

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