Germany votes for its first minimum wage

GMT 18:07 2014 Thursday ,03 July

Arab Today, arab today Germany votes for its first minimum wage

German Labour and Social Affairs Minister Andrea Nahles (C)
Berlin - AFP

Germany adopted its first nationwide minimum wage on Thursday, hailed as a victory by unions and the centre-left coalition partners of conservative Chancellor Angela Merkel.
The base pay of 8.50 euros ($11.60) an hour will eventually benefit more than five million workers in the low-wage sector when it is phased in between 2015 and 2017.
Ahead of the vote in parliament, which passed with a large majority, Labour Minister Andrea Nahles hailed it as a "milestone" of huge significance for millions of workers.
Introducing a universal minimum wage brings Europe's biggest economy in line with 21 of the EU's 28 member states.
The Confederation of German Trade Unions (DGB) welcomed the move after struggling for many years against what it claimed was  "propaganda"  that it would destroy jobs.
"The minimum wage won't be a job killer," said its chairman Reiner Hoffmann. "This has been confirmed by serious studies and the experience of our European neighbours and the United States."
Merkel herself had long opposed the minimum wage, warning it could force small and medium-sized businesses to lay off workers. Instead she favoured separate pay deals by region and sector.
But she caved in after tough haggling late last year on forming a "grand coalition" with the Social Democrats, who had promised steps to narrow a growing pay gap in Germany's 42-million-strong labour market.
"Now it's decided we must implement it," Merkel said after the vote. Referring to a "painful compromise", she conceded that nine out of 10 Germans backed the measure.
The starting level, set to be reviewed every two years, is in line with those in other major developed economies: slightly less than France's 9.53 euros, but above Britain's £6.31 (7.91 euros, $10.83).
The Munich daily Sueddeutsche Zeitung labelled it an "historic reform" that would protect workers from "appallingly bad rates of pay", commenting that "people who cut hair, serve beer or slaughter pigs... will feel their work better valued".
- 'Horror scenarios' -
German industry groups argued the minimum wage will destroy jobs, especially in the formerly communist east where, a quarter century after the fall of the Berlin Wall, wages are still lower than in western states.
"Not a good day for Germany," commented Bavaria's employers federation, which warned of "incalculable consequences for growth and employment".
The government has agreed certain exemptions, such as for under-18s, to encourage them to seek training or  apprenticeships rather than better-paid unskilled work.
Another exception will be people who re-enter the labour market after 12 months or more out of work, who can be paid less for the first six months on the basis that a badly paid job is better than none at all.
The base wage will also be phased in more slowly for newspaper delivery workers and seasonal fruit pickers, to help keep those sectors viable.
Agriculture Minister Christian Schmidt welcomed the minimum wage but warned that the price of German fruit and vegetables could rise and open the door for imports.
The EU's employment commissioner, Laszlo Andor, criticised the exceptions, telling the Welt daily that minimum pay must apply to all "so that people do not fall into poverty despite having work".
Spiegel Online said "horror scenarios have been used to illustrate how many jobs will be lost... As if 8.50 euros were an exorbitantly high hourly wage. We're talking about a monthly income of just 1,400 euros."
But the conservative Welt newspaper was critical.
"The government can now set the pay in all sectors Germany-wide," it said in a commentary. "But the number of jobs there will be under these conditions will be decided by the market."


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