The German Bundestag gave the green light on Thursday (3 July) to introduce a universal wage floor in the Federal Republic, drawing the final line under a 10-year political debate and with only five representatives voting against the law. EURACTIV Germany reports.
On 1 January, 2015 Germany will introduce a universal minimum wage of €8.50 for the first time.
“Dilligent, cheap, defenceless: that has been reality for millions of workers. And that is over now”, said Federal Labour Minister Andrea Nahles at the concluding consultation over the law in the Bundestag on Thursday (3 July).
In April, the German government drafted a law initiating the process. On Thursday, the grand coalition’s reform measure was passed in the Bundestag by a significant majority.
While the minimum wage applies to all workers in Germany effective in 2015, a transition period will apply for certain individual sectors until the end of 2016.
“Starting on 1 January 2015, the legal minimum wage of €8.50 will take effect across the board, equally in the east and the west, without any sector exceptions”, Nahles emphasised. Up until now, only 12 sectors have a generally binding minimum wage.
535 Bundestag representatives voted in favour during Thursday’s roll-call vote, while only five voted against. 61 MPs abstained. The Federal Council (Bundesrat) must still ratify the measure within the coming week.
“This law is of extraordinary importance for millions of employees, who can now finally receive a decent wage”, said the labour minister. Almost 4 million people will benefit from the new legislation effective in 2015, she said.
Compliance with the minimum wage will be overseen by Germany’s customs authorities, creating an additional 1,600 new jobs.
Lower minimum wage rates until 2016 will only be allowed in sectors where generally binding wage agreements already exist. By 2017, at the latest, €8.50 will also be paid in these cases.
Starting from 1 January 2017, a committee will discuss a possible increase in minimum wage. To do this, the body will orient itself according to standard wage adjustments. These take place every two years.
Qualification framework for internships
Whoever has a vocational or university degree has a right to receive the legal minimum wage, Nahles emphasised. As a result, “generation internship” has come to an end, she underlined.
The law includes a qualification framework for internships for the first time: Interns must receive a contract with clear internship goals and are entitled to receive a certificate upon completion.
Orientation, or compulsory internships before or during vocational studies, are not covered by the minimum wage – as long as they do not exceed three months.
The Greens and Left Party voiced the most criticism over a planned exception for people under 18 years-of-age and long-term unemployed people during the first six months after re-employment.
Labour market expert Klaus Ernst from the Left Party said his party has fought for years to implement a wage floor in Germany. “But why do they make the minimum wage as abysmal as it is in this law?” he asked.
It is not right that a 17-year-old cashier must work for five or six euros per hour while an older colleague receives €8.50, he said.
Green politician Brigitte Pothmer agrees with Ernst, arguing that the coalition is unnecessarily lumping together productive and weak long-term unemployed. With the exception from the minimum wage, Pothmer said, this group of people has been “sacrificed on the alter” to keep the peace within the coalition.
While Germany's grand coalition finally produced a draft agreement in April over introducing minimum wage, other EU member states had already been calling for an EU-wide wage floor. French socialists, for example, believe Europe should be more uniform on labour policy and viewed the German measure as a step in the right direction.
The European labour market is confronted with a paradox: while there is record unemployment in many EU member states, millions of jobs remain unfilled in many sectors that are key to economic development.