German Cabinet approves minimum wage hike, key Scholz pledge

By AP News

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BERLIN (AP) — Germany's Cabinet on Wednesday approved raising the country's minimum wage to 12 euros ($13.60) per hour in October, making good on a key pledge in Chancellor Olaf Scholz's election campaign last year.

BERLIN (AP) — Germany's Cabinet on Wednesday approved raising the country's minimum wage to 12 euros ($13.60) per hour in October, making good on a key pledge in Chancellor Olaf Scholz's election campaign last year.

Germany has had a national minimum wage since 2015. It was introduced at the insistence of Scholz's center-left Social Democrats, who at the time were junior partners in conservative Chancellor Angela Merkel’s government.

The minimum wage started off at 8.50 euros per hour, but a commission in which labor unions and employers are represented reviewed it regularly. The panel set the current level of 9.82 euros and a planned rise to 10.45 euros to take effect on July 1.

Scholz has long argued for a hike to 12 euros and made it a key plank of his campaign for Germany's election in September, which his party won narrowly.

“Many citizens of our country work a lot but earn little — that must change,” Scholz wrote in a tweet announcing the Cabinet decision. “For me, one of the most important laws and a question of respect.”

The wage increase still needs approval in parliament, where Scholz’s three-party coalition has a comfortable majority.

According to the draft legislation, some 6.2 million people in Germany currently work for less than 12 euros per hour.

After the one-time hike set for Oct. 1, the commission would again set further changes to the minimum wage.

Employers’ associations have complained that the increase endorsed by the Cabinet violates a principle that wage levels in Germany are set by employers and employee representatives.

The proposed increase comes as inflation in Germany and elsewhere has soared. Year-on-year inflation in the country, which has Europe's biggest economy, stood at 4.9% in January.

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Author: AP News

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Originally published by Associated Press Valuethemarkets.com, Digitonic Ltd (and our owners, directors, officers, managers, employees, affiliates, agents and assigns) are not responsible for the content or accuracy of this article. The information included in this article is based solely on information provided by the company or companies mentioned above.

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