Scholz: Raising the minimum wage is a matter of respect

Olaf Scholz / Photo EPA-EFE / JOERG CARSTENSEN / POOL

The German Chancellor Olaf Scholz said that his Social Democrats (SPD) continue their election promise to increase the national minimum wage to 12 euros per hour, because it is important to show respect for low-paid workers, reports Reuters.

The Social Democratic Minister of Labor, Hubertus Hale, on Friday unveiled a bill proposing to raise the wage limit from the current 9,82 euros from October onwards.

"For me, raising the minimum wage to 12 euros is one of our most important legislative projects and it is a matter of respect for the achievements of employees. "I am glad he is on his way now!" Scholz wrote on Twitter.

The labor ministry estimates that more than 6 million people across the country will benefit from the measure, and that the increase will cost employers about 1,6 billion euros between October and December.

Hale told Reuters on Friday that he expected the change to be particularly beneficial for employees in East Germany and women working in the care and other services sector where wages are traditionally very low.

The Labor Department sent its proposal to other departments on Friday, with the Social Democrats expecting their smaller coalition partners, the Free Democrats and the Greens, to support the bill, as agreed in coalition talks last year.

The cabinet is likely to pass the bill in February, and parliament is expected to pass a higher minimum wage before the summer recess.

Employers' associations said the increase of more than 20 per cent was too high and warned they could challenge the measure in court. Both Scholz and Hale have argued that higher minimum wages could lead to job cuts.

German companies are already suffering from acute labor shortages in many sectors of the economy, so higher wages are also seen as a way to attract more foreign workers.

The Bundesbank's central bank has warned that the government's plan could raise wages and increase overall price pressures amid already high inflation in Europe's largest economy.

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