German cabinet approves minimum wage hike and key Scholz pledge

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BERLIN (AP) — Germany’s cabinet on Wednesday approved raising the country’s minimum wage to 12 euros ($13.60) an hour in October, fulfilling a key commitment during Chancellor Olaf Scholz’s election campaign. ‘last year.

Germany has had a national minimum wage since 2015. It was introduced at the insistence of the center-left Social Democrats of Scholz, who at the time were junior partners in Chancellor Angela Merkel’s conservative government.

The minimum wage started at 8.50 euros per hour, but a commission in which unions and employers are represented has reviewed it regularly. The panel set the current level at 9.82 euros and a planned hike to 10.45 euros to take effect on July 1.

Scholz has long argued for a hike to 12 euros and made it a key part of his campaign for Germany’s September election, which his party narrowly won.

“Many citizens of our country work hard but earn little – this must change,” Scholz wrote in a tweet announcing the Cabinet decision. “For me, one of the most important laws and a matter of respect.”

The wage increase still has to be approved in parliament, where Scholz’s three-party coalition has a comfortable majority.

According to the bill, some 6.2 million people in Germany currently work for less than 12 euros per hour.

After the single increase set for October 1, the commission would again set new changes to the minimum wage.

Employers’ associations have complained that the increase approved by the Cabinet violates a principle that wage levels in Germany are set by employers and employee representatives.

The proposed increase comes as inflation in Germany and elsewhere has soared. Year-on-year inflation in the country, which has Europe’s largest economy, stood at 4.9% in January.

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