German cabinet approves minimum wage extension
Chancellor Angela Merkel’s government approved a draft law on Wednesday that could nearly double the number of German workers protected by a sectoral minimum wage.
Labour Minister Olaf Scholz’s plan to enable more sectors of the economy to introduce a minimum wage has come under fire from employers and been a sticking point in the ruling coalition of conservatives and centre-left Social Democrats (SPD) for months.
Scholz from the SPD, and Economy Minister Michael Glos, a conservative, came to an agreement late on Tuesday and the draft legislation was approved by the cabinet on Wednesday morning, government officials said.
A sector-specific minimum wage already applies to about 1.8 million employees in Germany across seven sectors, among them construction workers and postal delivery staff.
A further eight sectors, ranging from temporary workers to security personnel and comprising about 1.6 million employees, have sought inclusion in the minimum wage framework.
Germany’s total workforce numbers around 40 million.
The draft law allows for an extension of the so-called “Entsendegesetz”, an existing law which enables sectors of the economy to set their own minimum wage, but does not specifically name which new sectors will be included.
A working group under Scholz’s supervision has been charged with reconciling coalition differences over the new sectors.
The SPD has pushed for a blanket minimum wage for all, but Merkel’s conservatives reject this.
Glos, a member of the Bavarian Christian Social Union (CSU), was a particularly robust opponent of Scholz’s plans but dropped his opposition after a conversation on Tuesday evening with Merkel.
Merkel has softened her opposition to the idea of sector-wide wage deals since taking power in 2005 and had pushed for a compromise.
Glos succeeded in winning some concessions, notably an agreement which ensures government-decreed minimum wages are not permanent. That would theoretically allow a new government to reverse the wage law.
