Merkel Approves Germany’s First Minimum Wage

German Chancellor Angela Merkel has approved the country’s first minimum wage, at 8.50 euros an hour (£7; $11.75), to start in 2015.

At the moment, the country is one of seven in the 28-nation EU without a minimum wage level.

Germany has relied on trade unions and business groups to fix pay instead.

Mrs Merkel’s conservative Christian Democrats approved the change as part of a power-sharing deal with the Social Democrats (SPD).

The SPD was in favour of the move, but the conservative CDU and CSU parties had been keen to keep the status quo.

‘Workers’ dignity back’
Parliament is expected to debate the proposal this summer. It will then move to the upper house for approval in September.

Economists said higher wages in Europe’s biggest economy could help people spend more and stimulate the economy, promoting economic growth.

The SPD’s labour market policy spokesperson, Katja Mast, said: “Labour has got its dignity back with a fair payment of 8.50 euros, whether in the East or West and with no industry exceptions.”

But the wage does not cover minors, interns, trainees or long-term unemployed people for their first six months at work.

Some employers, such as those using temporary or seasonal, workers, will have two years to phase in the new minimum wage.

via BBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza