About 6.2 million people in Germany are expected to be able to benefit from a minimum-wage increase that lawmakers have approved. The rise is coming as inflation continues to rise in Germany.
German Chancellor Olaf Scholz made raising the minimum wage an important feature of his platform for the election and On Friday, lawmakers approved a bill to raise wages up to EUR12 ($12.90) for an hour on October 1, the increase is EUR2.18 each hour.
The rise will amount to EUR400 more per month for those earning the monthly earnings of $1700 According to the Minister of Labor Hubertus Heil.
“That’s not the end of the world however it does make an impact on the pocket,” Heil said before the vote in the Bundestag which is the lower house of the German the parliament.
Germany has introduced an annual minimal wage in 2015, at the insistance by Scholz’s centrist-left Social Democrats, who at the time were junior partners in the conservative German government headed by former Chancellor Angela Merkel.
“Many citizens in the United States have a job, but they make little money — this should be changed,” Scholz wrote in a tweet after his Cabinet was in agreement to the raise in February. “For me, this is one is one of our most significant laws is an issue of respect.”
Has anyone argued against increasing wages to the level of minimum?
The bill to raise the minimum wage was passed by a broad margin, with 400 voting in favor with 41 votes against, and 200 abstentions, mostly from the opposition group from the Christian Democrat Union and Christian Social Union (CDU/CSU).
Members of the center-right CDU/CSU stated that they were not against the increase in the minimum wage but they were against the manner in which Scholz’s coalition made up consisting of Social Democrats, Greens and Neoliberal Free Democrats brought it about. The Socialist Left Party joined the trio of coalition governments in the vote to approve the bill.
What is the German minimum wage determined?
In Germany, the minimum salary Germany is typically suggested by a commission which includes representatives from employees and employers. The lawmakers then make laws according to these recommendations. However, for this particular increase the government overruled the commission and decided to set the EUR12 mark by itself, and added that the commission would decide the future increase.
Certain employers have criticized the rise in the belief that the government interferes in the long-standing talks between employers, employees and unions in order to determine the compensation levels.
The politicians and unions, however they have rejected the criticism and said that the minimum wage of EUR12 could help alleviate the amount of poverty in Germany.
Who is entitled to the minimum wage in Germany?
The minimum wage in Germany covers a majority of the workers across the country older than 18. This includes seasonal workers regardless of where they come from.
In most countries there are a lot of exceptions to the law. Apprentices, employees who participate in job-promotion programs, long-term unemployment for the first six months following their return to the labour market, and self-employed persons aren’t included in the law on minimum wages.
People who travel across the country, like truck drivers and pilots of airlines are not covered either.
How often do minimum wages change?
The minimum wage for the country currently is EUR9.82 The minimum wage is currently EUR9.82, with an increase of EUR10.45 in July already recorded in the books. The commission for minimum wage will determine the amount of any future increases that could be possible in the months of January 2023, and June 2023.
Germany is home to one of the highest minimum wage rates within the European Union. Based on the rate currently set at EUR9.82 for a full-time worker, the average wage could earn a salary of EUR1,621 per month just ahead of Luxembourg (EUR2,257), Ireland (EUR1,775) and The Netherlands (EUR1,725) as well as Belgium (EUR1,658).
Some European Union countries — including Denmark, Italy, Austria, Cyprus, Finland and Sweden do not have a minimum wage for their nationals. These countries rely upon unions as well as specific sectors to determine their own salaries.
Germany’s government has rebuffed an application from Volkswagen AG to renew risk insurance for the company’s operations in China and marks an inflection point for a nation that has for a long time placed trade over the politics of international relations.
The decision made, which Berlin justifies by citing the treatment Beijing has shown to its Muslim Uyghur minority in the western part of China is a fulfillment of the promise made by Germany’s newly elected government to adopt more of a critical view towards dictatorships, including China’s. China is the largest trading partner of Germany..
This decision was not made public, however was confirmed by a number of people who were aware of the situation, isn’t likely to hinder German businesses from conducting business in China however it does raise the possibility of risk. It is also a precedent setting that, for the first time, connects the support of German firms who invest into China to China’s attitude towards Muslims from China’s Xinjiang province.
“In the situation of forced labour and the violence against the Uyghurs we are unable to guarantee insurance for any project within the Xinjiang region,” German Economics Minister Robert Habeck said over the weekend.VW CEO Herbert Diess, in an interview with German broadcaster N-TV on Wednesday, stated that the automaker continued to view China as the world’s top economic engine and that VW was determined to China as well as the factory in Xinjiang.
“We are able to assure that we do not employ forced laborers in the region, that we’re operating according to our standards and that we contribute an impact with our presence in the region. That’s why we don’t doubt this,” Mr. Diess stated.
A VW spokesperson refused to speak about the government’s decision and said the company hasn’t received any formal notice regarding its application for an extension of the existing government investment guarantee.
Businesses can seek government insurance to provide them with compensation in the event of a loss in assets or business that result from political instability in an overseas country. Since the beginning, the majority of this insurance has been provided to businesses who insure that they operate within China.When the government ceases to provide insurance to a country such as during the crisis in Russia in February, following the invasion by Moscow of Ukraine and the subsequent invasion of Ukraine, it implies that companies are operating within the nation at their own risk, and experts believe can deter investing in these countries.
The denial of VW’s application to renew its guarantee is happening as it is reported that the German government is involved in a wider rethinking of its relations with China to reduce the strategic and economic dependence of Germany on Beijing.
In this new strategy, Berlin has been prodding companies to diversify their international footprint and reduce dependency on massive Asian market. This move could spur the growing trend for global-minded European firms to shift investments to America. U.S. as a counterweight to China that they perceive as less reliable and uncertain market after a series of severe Covid restrictions earlier in the year.
“The Habeck decision is significant not for the reason that these assurances are essential for VW but rather because it is an indication of the fact that China’s government has begun examining investments within China in a more skeptical manner,” said Noah Barkin an analyst at Rhodium Group, a research company.
Berlin’s shift in direction was accelerated following Russia’s assault on Ukraine and Ukraine’s annexation of Crimea. Beijing has not condemned however, it was in the making for a while before it was. Under the previous administration led by the Chancellor Angela Merkel, Germany passed laws that permitted it to deter takeovers by its firms in order to safeguard national security. an act that was seen as a response to a rapid increase in technology acquisitions made by Chinese companies operating in Germany.
Yet, despite the growing concerns in the West about Beijing’s authoritarian tendencies in China and its increasingly aggressive stance abroad with the leadership of President Xi Jinping, many German businesses have continued to view China as the most lucrative market for them.
Volkswagen, BMW AG and Mercedes-Benz Group AG The three major companies of the German auto industry, as well as many of their suppliers earn around 40 percent of their annual revenues and an significant portion of their profits from China. Some, like VW the increase is at the cost investment in markets outside of China for instance, the U.S.
The economists warn that this exposure puts them as well as the wider German economic system at risk, in the case of economic or political disruptions, as was seen in the last two years during the pandemic. Lockdowns in China caused supply chains across the world to a standstill, and also hit the factories of Germany.
Germany’s new chancellor Olaf Scholz, hasn’t been an underlying force behind the pivot to China. Instead, the Green Party, which is part of Mr. Scholz’s ruling coalition of three parties has pushed for the change away from the foreign and economics ministriesthat they now are in.
German Foreign Minister Annalena Baerbock and her team of experts are holding meetings with think tanks to develop a new China strategy. In May, she had a meeting with the CEOs of German blue-chip firms who are heavily exposed to China.
She asked the group if they could make their businesses totally independent from China in the next few years, if needed according to someone who is familiar with the discussions.
The pressure on the part of Washington in Washington and Brussels has also pushed the agenda. In March it was announced that the European Union imposed sanctions on China for “large-scale detentions” of Uyghurs in Xinjiang.
Repression in China’s treatment of Uyghurs continue to surface and are gaining support from the public for a change. A human rights organization named Victims of Communism Memorial Foundation released a collection of images and documents which claimed to document Chinese police actions against the Uyghurs as well as pictures of prisoners in camps for internment.
Mrs. Baerbock, citing the documents, called for an independent and open investigation.
“Everyone who is exposed to these images is shivering in their spines. They’re frightening and scary,” Ms. Baerbock said to reporters last month.
In the beginning of May, Lars Klingbeil, co-chairman of Mr. Scholz’s Social Democratic Party, said that due to the Ukraine conflict, Germany was required to “act differently in the present as well as be more skeptical” regarding China.
The Hon. Scholz, in a address at the World Economic Forum in Davos last month, cautioned against being isolated from China in a political sense, adding: “Nor can we look away from the fact that the rights of human beings are being violated, as we’re witnessing the case in Xinjiang.”
Write to William Boston at william.boston@wsj.com
Corrections & Amplifications
Berlin’s policy toward China has shifted. The previous edition of the story stated incorrectly that Beijing’s policy towards China has changed. (Corrected by the reporter on 3 June)
In the last week of this year, German Chancellor Olaf Scholz announced that Ukraine will receive the most advanced Air defense systems Germany offers including four rocket launchers and an advanced tracking radar that can find Russian drones and missiles. In pledging to provide such advanced technology, Scholz surprised his critics who had accused him of slowing his feet for several weeks.
The chancellor has a good justification in his cautious attitude to weapon delivery: Pacifism is an integral part of his left-of-center Social Democratic Party (SPD). It is also the case for many SPD voters, with half of them prefer a prudent approach to avoid provoking Russia. This is the result of the most recent “Deutschlandtrend” poll conducted by pollster Infratest dimap. They included 1,337 potential people this week.
Support for Ukraine
The study found that those who support the Green Party, one of SPD’s coalition partners they are strongly in favour of decisive action, such as the delivery of weapons and an aggressive approach to Russia. This is extraordinary, given that the roots of the party are in the peace movement of the country in the 1980s.
Additionally, there’s a distinct difference between eastern and western German voters in the issue of military assistance to Ukraine 53% of those in the western part of Ukraine support military aid, whereas less than 35% the people in the region which was once socialist East Germany do so.
German government is also in support of EU sanctions on Russia in a continuing manner its diplomatic efforts. German Minister of Finance Olaf Scholz and French President Emmanuel Macron spoke to Russian President Vladimir Putin on the phone in recent times, but without any tangible results.
What are the opinions of voters on the efforts? A majority of survey respondents believed that the sanctions were too far. 41% believed they didn’t reach enough. 41% believed they needed to make more diplomatic initiatives. A quarter of respondents thought that Germany’s arms delivery was being too much.
Massive price increases
In the last couple of months, the priorities of voters have changed. In September of last year, a majority of voters ranked environmental change the top significant issue that German policymakers should concentrate on. However, now the foreign policy of Russia and Ukraine and fighting inflation are top of the list which puts environmental concerns in third spot.
The war has pushed up prices for energy however food prices are also rising dramatically. Nearly half of respondents reported that they are already forced to cut their expenses significantly as a result of this. For those with low incomes 77% believe they are already struggling with the financial burden, as are 59 percent of Eastern Germans with mean household incomes are lower than those of the west of Germany.
It is reported that the German government has announced a number of measures to reduce the financial burden for the citizens. From June to August there’s the €9 ($9.67) monthly fare for public transportation in the locality. the gasoline tax has been reducedand each taxpayer is entitled to an amount of EUR300 in lump sum to help offset the rising heating expenses. While the measures are temporary, the majority of the people polled were for.
Overall, however, the coalition government composed of SPD, Greens, and the Neoliberal Free Democrats (FDP) is losing support. Five-quarters of the respondents voice discontent with the government more than since it came into office in December.
The majority of those who support both the SPD as well as the Greens are satisfied with the overall performance of the government however FDP supporters are rapidly losing faith: half of those who support the party that promotes free market aren’t impressed by the record of the government.
The main opposition parties, those of the right-wing Christian Democratic Union and Christian Social Union (CDU/CSU) –and, more importantly those who support the extreme right popular Alternative for Germany (AfD) as well as the rising number of non-voters are dissatisfied with the course of government in Berlin. For households with lower incomes and those who live in the eastern region of Germany 70% of people are dissatisfied with the government’s policies.
The CDU/CSU has benefited from this trend, and is ahead in the monthly survey of the nation with a polling rate of 27%. the conservatives have once again emerged as the most powerful power on the scene in German politics. They were the head of the government for the majority of the 77-year period since the closing in World War II and lost control last year following 16 years of the government of the Chancellor Angela Merkel.The SPD continues to lose support and the Green Party continues to make gains on the federal scale as well and in the states of the region. Foreign Minister Annalena Baerbock and Economy Minister Robert Habeck of the Green Party have the highest approval ratings, with 60%, which is far ahead of the Chancellor Olaf Scholz (43%) and CDU chairman Friedrich Merz at 35%.
