Chancellor Angela Merkel vowed Wednesday to push through wage hikes for the low paid and boosts in pensions for elderly Germans over the next four years as well as tougher regulation of financial markets.
She was setting out in parliament the domestic and foreign policies for the next four years of her new, more leftist coalition. She formed a coalition a month ago with the Social Democratic Party (SPD) after agreeing to soften previous policies of austerity, dpa reported.
Germany will impose a minimum wage of 8.50 euros (11.6 dollars) hourly from the start of next year.
"I say with complete conviction, the advantages outweigh the disadvantages," she said of the new policy. "Employers and unions have the freedom to make use of this wherever it helps to preserve jobs," she said.
The chancellor said Germany would crack down on employers staffing their factories with "temps" from labor agencies who are paid less per hour than the rates for regular workers governed by collective labor agreements.
The chancellor said Germany would oblige employers to pay temps the same rate as regular workers after nine months on the job and would outlaw the use of temps for more than 18 months in one position.
The chancellor's speech came after cabinet backed pension changes which are expected to cost between 9 and 11 billion euros a year by 2030. The changes also call for an extra pension benefit for more than 9 million women whose children were born before 1992.