The increase in the minimum hourly wage to 12 euros has brought employers’ associations to the barricades. But the criticized surge in inflation and job losses are a pretense. It is about power and influence in future collective bargaining.
12 euros an hour? From October 1, the minimum wage is to be raised from €10.45 per hour to the €12 demanded by the Social Democrats during the election campaign. 1.55 euros more per hour. Almost 15 percent more. Skilled workers and many other professional groups can only smile mildly. For employees, however, especially in the service sector, that is a lot.
The lobbyists of the employers’ associations are against the increase. One hears that the already high inflation will be additionally fueled by this. In addition, a number of jobs were at risk. That may be the case in individual cases. Because some collective wages negotiated with a lot of fanfare by unions, such as the ÖTV, and employers are currently below 12 euros, the future minimum wage will push the entire collective wage level upwards.
Employees who currently work for less than 12 euros an hour will argue that they want to get more money than before. And especially smaller companies, especially in the service sector, will be weighed down by the increase. It is quite possible that some companies will be overwhelmed and then stumble.
But a significant surge in inflation and widespread job cuts? That is not to be expected. The current inflation in Germany is not due to high wages anyway. On the contrary: Compared to productivity, German wage levels are even low in a global comparison. The price increases currently weighing on consumers have a lot to do with fragile supply chains and rising energy costs. Although the rising minimum wage will inevitably lead to price increases, especially for services. But a massive surge in inflation is not to be expected as a result. The financial consequences are too small for that.
Employers fear for their power
Employers don’t care about a few cents more for their products. They fear for their power in future tariff poker. What’s more, they see the negotiations as being in jeopardy if politicians continue to set wage levels.
So far, employers’ associations have been bickering with trade unions in a way that attracts attention. It took weeks for an agreement to be reached. There were strikes. In the end, both sides felt that they had wrestled hard and got the best possible result. An independent minimum wage commission was even set up to agree on minimum wages. All of this threatens to become waste with the new lower limit of 12 euros decreed by the federal government. The fears of inflation and job cuts are an excuse. With a view to future collective bargaining, employers fear for their power.