Minimum wage increase of 14 percent: Danger for jobs in Jerichower Land!

Minimum wage increase of 14 percent: Danger for jobs in Jerichower Land!

In Germany, the statutory minimum wage will be raised to 12.82 euros per hour on January 1, 2025. This is the result of the last meeting of the Minimum Wage Commission, which deliberated on June 26, 2023. From then on, wages will rise again drastically - to 14.60 euros per hour in 2027. However, the developments are met with resistance, especially from the Jerichower Land, where there is criticism that a wage increase of almost 14 percent is viewed as excessive. These concerns are expressed by, among others, Guido Eisbein, the deputy district chairman of MIT Jerichower Land, who points out that the increase could endanger jobs in small and medium-sized companies.

The Minimum Wage Commission has taken its fourth decision to adjust the minimum wage and the impact is being closely evaluated. Various factors such as employee protection, competitive conditions and employment in different sectors are taken into account. BMAS informed that the commission meets every two years and makes its results available to the federal government in reports.

Concerns in the economy

However, MIT's support is not without its problems. The motivation to look critically at an increase in the minimum wage is based, among other things, on the concern that rising non-wage labor costs could quickly run into the hundreds of thousands. Companies could be faced with the choice of either paying collective bargaining employees above-average wages or making the training of young talent financially unattractive. Such a step would not only reduce the attractiveness of the training occupations, but also reduce the gap between trainees and skilled workers, which would further reduce the appreciation of training in society.

Competitiveness is also viewed critically. Many companies are increasingly confronted with international competition, where the minimum wage level is often significantly lower. This could lead to an exodus of industry and production that cannot even be stopped by tax relief. The decision of the Minimum Wage Commission could therefore have far-reaching consequences for Germany as a business location.

Don't forget the positive

On the other hand, one should not overlook the positive aspects of such an increase. The initiative to ensure “more net of gross” for some employees is seen as a good signal for both employees and employers. However, a newspaper report raises the question: What price do companies and ultimately consumers pay?

Future discussions will probably be necessary to find a balance between adequate minimum protection for employees and the competitiveness of companies. While the voices calling for an increase in the minimum wage are becoming louder, the concern that this could set off a price spiral that affects everyone cannot be underestimated. At this point, too, the Minimum Wage Commission must continue to monitor the situation closely.

In summary, it remains to be seen how the new minimum wage will affect the various sectors of the economy. Society is called upon to actively support the debate surrounding this topic.

For further information about the structural background of the minimum wage debate, these articles, among others, provide more insight: Meeting point, BMAS and South German newspaper.