‘Biggest pay rise of their lives’: Germany hikes minimum wage to €12

The German parliament passed legislation on Friday to raise the minimum hourly wage to 12 euros, a key promise made by Chancellor Olaf Scholz's during his campaign for election last year.

'Biggest pay rise of their lives': Germany hikes minimum wage to €12
A man arranges shelves at a logistics hall in Brandenburg. Photo: dpa-Zentralbild | Jens Büttner

The measure cleared the Bundestag lower house by a large majority, with support from deputies from the ruling centre-left-led coalition as well as the far-left Linke party. The conservative CDU and far-right AfD abstained.     

The one-third increase will affect 6.2 million people, among an active working population of 45.2 million people.    

The law will see the minimum wage go up in two steps, from 8.82 euros to 10.45 euros on July 1, followed by a second increase to 12 euros on October 1.    

Labour Minister Hubertus Heil called the move a “matter of respect” for hard work, saying that for low-wage earners it would mean the “biggest pay increase of their lives”.    

A flagship policy in Olaf Scholz’s campaign manifesto for elections last September, the change is not without its critics.    

Some experts fear it will add to wage pressures and price rises at a point where inflation is already unusually elevated.    

In May, consumer prices rose at a 7.9 percent clip, a post-reunification record for Germany driven by the rising cost of energy.    

A recent survey of 800 businesses by the commercial foundation Familienunternehmen found that 89 percent of leaders feared such a wage-price spiral.    

Sectors already under pressure from increases in the prices for raw materials are particularly concerned.    

The agricultural business lobby DBV warned against the “massive” impact of the wage hike.    Others argue the risks emanating from the measure are more limited.    

Reasonable salary increases were needed to “stabilise the economy” the president of the influential DIW economic institute, Marcel Fratzscher, wrote in a column.    

At the same time, unions are calling for even more significant pay rises to match the soaring cost of living.    

Temporary inflation was “not as damaging” for the state as the loss of purchasing power for employees, the head of the German trade union federation DGB, Yasmin Fahimi, said.   

Workers in a variety of sectors are in the process of negotiating new pay settlements.    

In steel, several thousand employees held a strike in recent days to demand an increase of 8.2 percent. 

READ ALSO: Germany announces biggest pension hike in decades

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German parliament to hold urgent debate on citizenship

Politicians will gather in the Bundestag on Thursday afternoon for an urgent session on Germany's planned changes to citizenship law.

German parliament to hold urgent debate on citizenship

According to information on the Bundestag website, the urgent discussion was scheduled on the request of the opposition CDU party, who have been fiercely critical of the planned reforms in recent days.

The debate, which is scheduled to start at 2:50pm and last an hour, will see MPs air their views on the government’s planned changes to citizenship law.

Interior Minister Nancy Faeser (SPD) is currently in the process of drafting a bill that will simplify and speed up the naturalisation process in Germany, which she said this week is “as good as done”.  

The law will end a ban on dual nationality for non-EU citizens, meaning people from places like India, the USA and the UK can naturalise as Germans without losing their current citizenship – or citizenships. 

It also foresees a dramatic reduction in the amount of time it takes to become eligible for German citizenship.

In future, people would be able to naturalise after five years of residence in the country rather than the current eight, while people who speak good German or fulfil other integration criteria could naturalise after three years rather than six.

Additionally, the Interior Ministry wants to grant automatic German citizenship to the children of foreign parents – provided their parents have been in the country at least five years – and remove language requirements for members of the guest-worker generation who want to become German. 


‘We don’t need reform’

High-profile politicians from the CDU have slammed the government’s plans to ease citizenship rules, with parliamentary leader Thorsten Frei describing the move as an attempt to “sell-off” German passports as a “junk commodity”.

“We don’t need reform,” Frei told public broadcaster ZDF. “There would no majority whatsoever in any party’s supporters for this change.”

Earlier this week, CDU leader Friedrich Merz had argued that expediting the naturalisation process would damage integration and allow people to immigrate into the benefits system more easily. 

“The CDU will not close its mind to a further modernisation of immigration law and the citizenship law of the Federal Republic of Germany,” Merz told a meeting of CDU and CSU MPs in Berlin on Tuesday.

“However, we also attach importance to the fact that the granting of citizenship takes place at the end of an integration process and not at the beginning of it.” 

The CDU and CSU have previously been vocal opponents of permitting dual nationality, arguing that holding more than one citizenship would prevent people from fully integrating into German life. 

Nevertheless, it remains unclear if the opposition will be able to block the legislation in any meaningful way.

If there aren’t any substantial changes to the core of the citizenship bill when the amendments are made, the Interior Ministry believes it won’t need to be put to a vote in the Bundesrat – the upper house where the CDU and CSU hold a majority.

Instead, the parties of the traffic-light coalition – the Social Democrats (SPD), Greens and Free Democrats (FDP) – would simply be able to vote it through in the Bundestag. 

READ ALSO: EXPLAINED: Could Germany’s conservatives block dual citizenship?