According to the Ifo Institute, the renewed increase in the minimum wage in Germany on October 1 should “further drive up inflation, which is already high.” Almost a third of the 6,900 companies surveyed employ some of their staff for less than 12 euros an hour, and 58 percent of these companies “are planning to raise their prices in response,” said the economic researchers in Munich on Friday.

Six million people will benefit from elevation

The minimum wage in Germany rose in July from 9.82 to 10.45 euros per hour and will be increased by law to 12 euros on October 1st. More than six million employees benefit from this. According to the Ifo Institute, “price increases are the most frequently mentioned consequence” among the companies affected. Half of the affected companies expect less profit, a quarter with less demand. In return, 18 percent are considering reducing the working hours of the employees or reducing special payments. Only 13 percent of the companies affected planned to cut jobs as a result, said Ifo labor market expert Sebastian Link.

Big regional differences

On average across all companies, a good six percent of employees will receive a higher minimum wage from October. According to the Ifo, there are major differences depending on the region and industry. In West Germany, 29 percent of the companies surveyed employ some of their employees for less than 12 euros an hour, in East Germany 40 percent. In the catering industry, 78 percent of the companies surveyed are affected, in temporary employment 64 percent, in retail 58 percent, in the textile industry 72 percent and in the food and beverages industry 61 percent. In mechanical engineering and the chemical industry, on the other hand, the minimum wage hardly plays a role. The construction industry pays an industry minimum wage of 12.85 euros per hour.