Economist Achim Truger, one of the so-called ‘economic wise men,’ is calling for a much stronger increase in the minimum wage for the coming year than planned. “The current minimum wage of 12.82 euros planned for 2025 does not provide minimum protection for workers after high inflation. It would need to increase to at least 14 euros by 2025,” he told “Bild.” According to the member of the Council of Economic Experts, the labor market can “easily cope” with this increase, and there is no fear of a rise in unemployment. “The minimum wage has proven itself, all doomsday scenarios have not come true,” said Truger. The minimum wage will increase from the current 12.41 euros to 12.82 euros next year. The SPD and Greens have long criticized this as too low. The Green Party in the Bundestag, the Left Party, and the Verdi trade union are calling for 15 euros.
The minimum wage is set by a commission responsible for that, in which social partners are represented. According to an EU directive, it should be at 60 percent of median income, currently around 14 euros. However, employers emphasize the discretion of member states in implementing EU requirements. Last year, union representatives on the minimum wage commission were overruled. As a result, the minimum wage increase lagged behind the inflation rate.
Truger’s call for a significant minimum wage increase has sparked a debate among policymakers, labor unions, and employer representatives. While Truger argues that the labor market can absorb the proposed increase to 14 euros by 2025 without causing a rise in unemployment, employers are wary of the potential impact on their bottom line. The debate underscores the broader discussion around income inequality and the challenges of ensuring fair wages for all workers in the face of rising living costs.
The decision on the minimum wage increase for 2025 will ultimately be made by the minimum wage commission, taking into account various factors such as inflation, economic growth, and social considerations. The EU directive provides a guideline of 60 percent of median income, but the final decision is left to the discretion of each member state. The upcoming deliberations will likely be closely watched by labor rights advocates, policymakers, and economists as they seek to ensure a fair and livable wage for all workers.
As the debate over the minimum wage continues, it is clear that there are diverging opinions on the appropriate level for 2025 and beyond. While Truger and some political parties advocate for a significant increase to 14 euros, employers stress the need for flexibility and economic sustainability. Finding a balance between providing fair wages for workers and maintaining a competitive business environment will be a key challenge for policymakers in the coming months. The outcome of this debate will have far-reaching implications for workers, businesses, and society as a whole.
