On October 1st, the gross minimum wage will rise from EUR 10.45 per hour to EUR 12. Labor Minister Hubertus Heil (SPD) defended this unique political intervention in an interview with the Funke media group.

Minister of Labor Hubertus Heil (SPD) has rejected criticism of the minimum wage increase on October 1st. The increase to twelve euros per hour is “for many employees the biggest jump in wages in their lives,” said the SPD politician to the newspapers of the Funke media group. This helps “especially now in the crisis”. Heil countered fears that the new minimum wage would lead to major job losses.

“Anyone who works full-time for the minimum wage has almost 300 euros more gross per month,” said Heil about the increase. The higher minimum wage will have “no negative effect on the labor market from a macroeconomic point of view”. “People who keep the shop running but earn little and don’t bring their money to Luxembourg or the Cayman Islands can afford more.” This is “also a question of respect and fairness”.

The statutory minimum wage will increase from EUR 10.45 gross per hour to EUR 12 from Saturday. Heil reiterated that it was a one-off step. “We have no plans for further political intervention in the development of the minimum wage,” said the minister. “For further increases, the Minimum Wage Commission will take on its important task again.”

Heil emphasized that the minimum wage will always remain an absolute wage floor. “In order to get better wages and working conditions, we have to promote collective bargaining in Germany. 52 percent is not enough,” he warned.

The minister referred to an EU directive according to which member states would have to take action if collective bargaining coverage falls below 80 percent. “That’s why we will continue to ensure that there is a decent wage development above the minimum wage – for example, by only giving federal orders to companies that pay according to the collective agreement.”