Scholz suggests German minimum wage should align with broader wage trends

Scholz suggests German minimum wage should align with broader wage trends

German Chancellor Olaf Scholz (SPD) has stated that Germany's minimum wage should increase in step with broader wage trends.

Minimum wage should follow general pay growth, says Scholz

Chancellor Olaf Scholz emphasized that the national minimum wage (Mindestlohn) should rise in line with overall wage increases across Germany. In his weekly video message, Scholz noted that German wages have recently seen significant growth, more than in past years. “Good working conditions, fair wages, and increased employment are key to fostering new growth,” he added.

According to the Federal Statistical Office (Destatis), the average annual income in Germany is currently €45,358 before tax. From January 1, 2024, the minimum wage stands at €12.41 per hour, amounting to a yearly pre-tax income of €24,616.48.

Scholz explained that if minimum wage were already tied to general wage increases, it would currently be €14 per hour. Planned increases will see the minimum wage reach €12.82 per hour by January 1, 2025, and possibly €15 by January 1, 2026, though the latter increase is still pending confirmation.

The Federal Labour Ministry estimates that approximately six million people in Germany earn minimum wage, with women and workers in former East German states overrepresented in this group.

How is the minimum wage determined in Germany?

Since Germany introduced a statutory minimum wage in 2015, the amount has risen annually, with increases determined by the Minimum Wage Commission (Mindestlohnkommission). The commission, comprising six members—two representing employers, two representing employees, and two academic advisors—bases wage adjustments on collective bargaining agreements negotiated by German trade unions and employers.

The commission ensures that minimum wage adjustments provide adequate employee protection, maintain fair competition, and avoid job losses. Once a minimum wage is set by the commission, the German government implements the suggested rate, as it cannot set a different amount independently.

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