For many years, Germany was one of only a few European countries not to have a minimum wage or comparable mechanism. Since January 1, 2015, however, the country has had a minimum wage of 8.50 euros an hour. The trade unions fought long and hard to achieve this victory.
Compared to other countries, Germany was and still is a nation with relatively well-organized trade unions and relatively effective collective bargaining agreements on setting pay. In view of this, the German trade unions for a long time saw little need for a legal minimum wage.
Starting in the 1990s, however, a low-pay sector grew significantly in the country, predominantly encouraged by political decisions and deregulation of the labor market. At the same time, there were certain industries in which employers increasingly refused to conclude collective bargaining agreements and thus ensure fair pay.
That’s why, for the first time in 2002 and 2003, two DGB member unions began demanding the introduction of a legal minimum wage. These were the Vereinte Dienstleistungsgewerkschaft (ver.di – “United Services Union”) and the Gewerkschaft Nahrung-Genuss-Gaststätten (NGG – “Union for Food, Beverages, and Catering”), precisely those unions that organized many employees in industries that traditionally offer poor wages and, at the same time, have very many small-scale workplaces that were difficult to unionize – hotels and restaurants, retail, call centers, security services, or hairdressers, for example.
In the first few years after 2002/03, other DGB member unions remained skeptical of the need to introduce a legal minimum wage. In 2006, however, the DGB Federal Congress took a decision to demand the introduction of a legal minimum wage set at 7.50 euros an hour. The DGB Federal Congress is the “parliament” and highest decision-making authority in the DGB, represented by delegates from all member unions.
The DGB took over management of the campaign for a minimum wage in 2007, a high-profile campaign initially launched by ver.di and NGG. In 2010, the DGB Federal Congress increased its demand for a minimum wage to 8.50 euros an hour. At the 2013 German parliamentary elections, the trade unions’ sustained minimum wage campaign succeeded in swinging opinion toward the “pro minimum wage” side: over 80% of the public supported the introduction of a minimum wage. Even conservative and liberal party supporters also largely came down on the side of a minimum wage. Except for the economically liberal FDP, all the German parties included the introduction of a minimum wage in their manifestos for the 2013 parliamentary elections.
After the election, the coalition partners of the CDU, CSU, and SPD (the “grand coalition” made up of conservatives and social democrats) agreed on a legal minimum wage of 8.50 euros, which then came into force at the beginning of 2015. The law provides for an initial minimum wage increase in 2017, after which it will follow collectively agreed wages. A low pay commission, made up in equal parts of union representatives, employer representatives, and non-affiliated academics, advises the government on increasing the minimum wage.
The DGB is, however, critical of groups and sectors that have been exempted from the minimum wage. As one example, young people under 18 are not entitled to the minimum wage, while the long-term unemployed only receive the legal minimum wage several months after taking up a new job.
In general, however, the DGB considers the legal minimum wage fought for by the unions over more than ten years a historic success for the German trade union movement and one of the most far-reaching work and social reforms since the Second World War.
More information on the minimum wage law can be found here (information in German)
Minimum industry wages existed for decades in Germany prior to the introduction of a blanket minimum wage. In contrast to the legal minimum wage, however, these minimum wages were negotiated for specific industries in collective bargaining agreements between trade unions and employer associations. When employers and unions then jointly made a formal request to the government to make a minimum industry wage “generally binding” and the competent ministry approved the motion, this minimum wage then became legally binding for all employees and employers in that industry. The possibility of setting minimum industry wages via collective bargaining agreements was further strengthened by the introduction of the legal minimum wage. If a minimum industry wage is higher than the legal minimum wage of 8.50 euros an hour, the higher minimum industry wage remains in force. Minimum industry wages exist in Germany in many sectors, including many trade industries (e.g. the building industry), providers of training and professional development, in the nursing care industry, and in the temporary employment sector.