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Germany's Scholz says raising minimum wage a matter of respect

EconomyJan 22, 2022 11:35AM ET
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© Reuters. FILE PHOTO: German Chancellor Olaf Scholz speaks during a joint news conference with German Economy and Climate Minister Robert Habeck and German Finance Minister Christian Lindner in Berlin, Germany, January 21, 2022. Michael Sohn/Pool via REUTERS/File P

BERLIN (Reuters) - German Chancellor Olaf Scholz said on Saturday that his Social Democrats (SPD) were pushing ahead with their election promise to raise the national minimum wage to 12 euros an hour, as it was important to show respect for low-paid workers.

Social Democrat Labour Minister Hubertus Heil presented a draft law on Friday proposing to increase the wage floor from the current 9.82 euros from October onwards.

"For me, raising the minimum wage to 12 euros is one of our most important legislative projects and it's a matter of showing respect for the achievements of employees. I'm glad it's on its way now!," Scholz said on Twitter (NYSE:TWTR).

The labour ministry estimates that more than 6 million people across the country will benefit from the measure and that the increase will cost employers some 1.6 billion euros in October-December.

Heil told Reuters on Friday that he expected the change to benefit especially employees in eastern Germany and women working in the care sector and other services where wages are traditionally very low.

The labour ministry sent around its proposal to the other departments on Friday, with the Social Democrats expecting their junior coalition partners Free Democrats and Greens to back the bill as agreed in coalition talks last year.

The cabinet is likely to pass the draft law in February and parliament is expected to adopt the higher minimum wage before the summer break.

Employers associations have said the increase by more than 20% was too high and warned they could challenge the measure in court. Scholz and Heil both have pushed back against assertions that a higher minimum wage could lead to job cuts.

German companies are already suffering acute labour shortages in many sectors of the economy, so higher wages are also seen as a way to attract more foreign workers.

The Bundesbank central bank has warned that the government's plan could push wages up across the board and increase overall price pressures at a time of already high inflation in Europe's largest economy.

Germany's Scholz says raising minimum wage a matter of respect
 

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Comments (6)
Vi Ma
Vi Ma Jan 23, 2022 12:50AM ET
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This is a unique band of leaders, both political n capitalist, we are seeing in the west who defend inflation !! Who voted them in though?
Sattar Langary
Sattar Langary Jan 22, 2022 10:41PM ET
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raising minimum wage is very unsmart and causing inflation.
Jan 22, 2022 9:28PM ET
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Raising minimum wage decreases dependence on government assistance, increases revenue from taxable income, and lowers deficit spending. Circulating money at low levels of income has more social economic advantages than supply side economics used to support unmerited stock market gains that systemically result in crashes. Down votes expected.
Kay Lu
Kay Lu Jan 22, 2022 12:30PM ET
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This new German chancellor is an epic id$$t full of sh&&t... Not boding well for this country
Chad RicherThanYou
Chad RicherThanYou Jan 22, 2022 11:47AM ET
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Should have been done 20 years ago
gab nea
gab nea Jan 22, 2022 11:42AM ET
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about time.
 
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