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Germany Battles Over Minimum Wage Law

Ending months of negotiations, Germany’s legislature voted on a minimum wage law mandating $11.61 an hour. The vote passed despite opposition from both trade unions and businesses calling out the program’s potential flaws.

The vote is considered to be a piece of landmark legislation for Germany, as in the past wages were set via agreements between employers and employees. Before this vote, Germany was one of a group of seven countries in the European Union who did not have a national minimum wage.

Opponents of the legislation, however, are outraged over some changes to the legislation in the eleventh-hour before the vote. Citizens under the age of 18 do not fall under the protection of the new law. Opponents claim that having a minimum wage would prevent younger citizens from being able to hold an apprenticeship.

For the first six months after the law is enacted, those who have been without employment for a long period of time will also fail to be covered by the law. Supporters of this restriction claim that if the long-term unemployed were paid $11.61 from the point of the law’s enactment, it would just make it more difficult for the unemployed to find jobs.

Compulsory work placement, something which mainly affects students, will also not be covered by the new minimum wage law, along with newspaper publishers for two years.

According to the Federal Association of German Newspaper Publishers, around 160,000 newspaper sellers will be affected by the lack of pay and the total number of people who won’t be covered by the new law is approximately 3 million.

There are around 7.1 million people in part-time employment in Germany, according to a 2012 report. The report also stated that around 4.8 million people were unemployed.

“These exemptions hit the most vulnerable in the labor market, of all people,” said Frank Bsirske, the head of the white-collar trade union Ver.di. “Millions of people will continue to be exposed to the arbitrariness of starvation wages.”

The bill has also drawn criticism from the European Union executive body. According to László Andor, the European Social Affairs Commissioner, the European Commission requires that countries who are members of the E.U. have a minimum wage that includes everyone in order to prevent citizens from falling into poverty even though they may be employed.

German economists and lobbyists for many of Germany’s businesses have argued against the minimum wage bill as well; stating that a rise in the minimum wage may run the risk of driving prices up for consumers and could potentially end thousands of jobs in the weaker regions of Germany.

Supporter of the bill argue, however, that having a period of time to allow businesses to adapt is necessary.

“This has dominated the political debate in our country for ten years,” said Labor Minister Andrea Nahles, one of the supporters for the bill. “It’s coming now and that’s reason to celebrate. Millions of employees in this country will finally get a fair wage.”

– Monica Newell

Sources: World Socialist Web Site, The Wall Street Journal
Photo: Arab News