The statutory minimum wage is to be increased again in early 2024. Before the competent commission of employer and employee representatives presents its proposal on Monday, experts are discussing the future amount controversially. The minimum wage is currently 12 euros per hour.

In view of the sharp rise in consumer prices, not only social associations are in favor of an increase of 2 euros to 14 euros, that would be an increase of 16.7 percent. In terms of costs, companies are hoping for a smaller increase. As a rule, the Federal Government makes the Commission proposal binding with a regulation. The traffic light coalition of SPD, Greens and FDP had exceptionally increased the minimum wage by law from 10.45 euros to 12 euros on October 1, 2022.

“An increase in the minimum wage that is too significant and too rapid would be very difficult for many retail companies to cope with,” said the chief executive of the German Retail Association (HDE), Stefan Genth. “As a result, there could be business closures and downsizing.”

Caution required – or not?

The Munich Ifo Institute also called for restraint. Ifo President Clemens Fuest told the Funke media group (Sunday) that the Minimum Wage Commission is tasked with basing its recommendation for the increase on how collectively agreed wages have developed overall. “In the first quarter of 2023, collective wages were almost three percent higher than a year earlier, and the increase could be slightly higher by October. The point of this rule is that the minimum wages should follow the general collective wages, but should not determine wage development.”

Marcel Fratzscher, President of the German Institute for Economic Research, said on the other hand that an increase in the minimum wage to 14 euros from the current 12 euros would have positive effects on the economy as a whole. “Because it would support the purchasing power of many people and thus also stimulate demand and contribute to the economic upswing,” he said.

The Paritätische Gesamtverband and the Sozialverband VdK campaigned for a minimum wage of at least 14 euros. “Someone who works full-time must be able to take care of themselves from their wages,” said the managing director of the parity, Ulrich Schneider, the dpa. “It’s not just a question of justice, but also of decency.” It is also about future pension claims. VdK President Verena Bentele demanded that the commission “introduce a poverty-proof wage for the lowest income groups”.

According to Katja Mast, the first parliamentary director of the SPD parliamentary group, the minimum wage introduced in Germany in 2015 has “proven itself a million times over”. Mast told the dpa that it was the state promise that nobody had to work at dumping wages. However, the aim is not for people to work permanently for the minimum wage. “That would be disrespectful.”