Minimum wage increased: 14.60 euros from 2027 - economic concerns are growing!

Minimum wage increased: 14.60 euros from 2027 - economic concerns are growing!

The Minimum Wage Commission today passed a resolution to increase the statutory minimum wage in Germany. From January 1, 2026, the minimum wage will initially rise to 13.90 euros before increasing to 14.60 euros at the beginning of 2027. Around six million employees in sectors such as retail, catering, logistics and cleaning are expected to benefit from this increase. The decision marks the largest wage increase decided by the social partnership since the introduction of the minimum wage in 2015, when it was 8.50 euros and has now risen to 12.82 euros Deutschlandfunk reported.

Minister Bas announced that the committee's decision would be implemented quickly. Nevertheless, the increase remains below the required target of 15 euros in 2026, which was set in the coalition agreement between the Union and the SPD. Marie-Christine Ostermann, President of the interest group “The Family Businesses,” has already expressed her concern about the economic consequences as she fears turbulent times for companies. At the same time, the President of the German Trade Association, Stefan von Preen, fears that the increase could endanger jobs in the retail sector.

Criticism and concerns

Reactions to raising the minimum wage have been mixed. Marcel Fratzscher, President of the German Institute for Economic Research, described the decision not to increase the minimum wage to 15 euros as a “missed opportunity”. He argues that a higher minimum wage could increase productivity and make the labor market more attractive. According to Fratzscher, the increase to 15 euros could also have a positive effect on gross domestic product, which grew by 1.7 percent in 2015, while 2023 and 2024 saw declines.

Ulrich Kater, chief economist at Deka Bank, also warns of the possible negative consequences of the increase. He reports a significant decline in minimum wage jobs, falling from 2.5 million to 1.4 million over the past three years. In addition, raising the minimum wage could fuel inflation as other wage groups are also raised, which could further threaten economic stability, said Kater.

Independence of the Commission

Despite these concerns, the Minimum Wage Commission warned the federal government against political intervention in raising the minimum wage limit. Christiane Schönefeld, member of the commission, emphasized the independence of the committee. Steffen Kampeter, another protagonist, criticized the political and media pressure being exerted on the Commission. In contrast, members of the SPD are calling for the minimum wage to be implemented politically if necessary, which is further fueling the discussion about the wage increase.

The federal government now faces the challenge of implementing the Commission's decision while addressing business concerns, while the majority of affected workers and unions hope for the minimum wage to be increased.