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Germany set to introduce new minimum wage from 2015


Germany

Germany set to introduce new minimum wage from 2015

Germany’s cabinet has agreed to a new national minimum wage of €8.50 per hour, the first time it has been introduced on a countrywide basis.

Angela Merkel’s conversative Christian Democrats approved the change as part of a power-sharing deal with the Social Democrats, the SPD.

The measure will be phased in from 2015 and fully in place by 2017, with some exceptions.

Labour minister Andrea Nahles from the SPD said that she wants “young people to get the best education possible and not be enticed by jobs that pay them relatively well. It’s for that reason that people under the age of 18 are not included in the new minimum wage. I want a balanced solution for the long- term unemployed and therefore they are also excluded from the new changes for a period of six months.”

Along with minors and the long term unemployed, the new minimum wage will not apply to interns and trainees.

Of the 28 member states in the EU, 21 have minimum wages. Those without it tend to have smaller low-wage sectors than Germany.

Just over one tenth of workers in western states earn less than the new €8.50 per hour rate compared with a quarter of those living in eastern states according to data from the from the Halle Institute for Economic Research in Germany.

Several business associations have been critical saying it would result in many job losses.

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