Gut five months after raising the statutory minimum wage to twelve euros per hour, the German social association (SoVD) has called for a further increase of more than two euros at the turn of the year. “After a year of war with the consequences that can be felt everywhere and nine months that still lie ahead of us, we believe that inflation must be compensated for more here,” said SoVD CEO Michaela Engelmeier to the newspapers of the Funke media group. “For that he would have to minimum wage rise to 14.13 euros according to our calculations.”
The traffic light coalition of SPD, Greens and FDP had raised the minimum wage to 12 euros per hour by law on October 1, 2022. Until then it was 10.45 euros. The increase was a central promise made by the Social Democrats in the last federal election campaign.
The President of the German Institute for Economic Research (DIW), Marcel Fratzscher, argues in a similar vein. In view of the high inflation, the economist advocates measures to relieve people with low incomes in particular. “Politics should specifically reduce VAT on healthy and sustainable food and other basic necessities and, in return, increase taxes on fossil fuels and other non-sustainable consumption,” Fratzscher told the “Handelsblatt”.
Irrespective of this, higher wages are “the most effective instrument” against overburdening low earners. “In addition, politicians have to think again about raising the minimum wage again, because the significant increase to twelve euros last year was already neutralized by high inflation,” Fratzscher continued.
The high inflation hits people with low incomes much more than those with high incomes, said the economist. Because they have to spend a large proportion of their monthly income on things like food, which are particularly affected by sharp price increases.
With a view to many over-indebted private households, the SPD was open to further relief. “If almost every tenth household in one of the richest countries is overindebted, then something doesn’t work in the distribution,” said SPD parliamentary group leader Verena Hubertz of the “Handelsblatt”. “There is a need for big adjustments here, especially when it comes to wages and fair taxation between the various professions.”