New German government weighs hiking minimum wage

DW (English)

The minimum wage for German workers is set to rise to an hourly €15. Though such a boost would put more money into the pockets of many, it could also increase production costs and contribute to increased inflation.

Transcript

00:01Washing, cutting, trimming.

00:03Oksana has been working at the Cutman hair salon in Berlin for three years.

00:07Like many in her line of work, she's passionate about styling her customers

00:12and having a friendly chat while doing so.

00:15At the same time, many hairdressers are also worried

00:18as they're making minimum wage in times of drastically rising prices.

00:23In Germany, 6 million people work for 12 euros and 82 cents per hour,

00:28most of them in retail, gastro and service jobs.

00:31Their exact earnings are set by an independent commission.

00:34They're required to look towards the median wage and set the minimum at around 60%.

00:40But for employers, the question of higher wages is not such an easy equation.

00:47Here at Cutman, that would mean that we have to cut down on personnel

00:51and we have to raise prices.

00:53100% will have to pass this on to customers

00:56because the money has to come from somewhere.

00:59Ever since the minimum wage was standardized back in 2015,

01:03it rose steadily starting at 8 euros and 50 cents.

01:07If the minimum wage were to reach 15 euros, as is currently discussed,

01:11that would be a 76% rise over 10 years, far outpacing standard wages,

01:17which on average have only gone up by 22% between 2015 and today.

01:22Pros and cons of a higher minimum wage can be argued in any hair salon,

01:27or bakery or restaurant for that matter.

01:29But they're also debated among economists,

01:31and they too disagree on what's best for the country and its stagnating economy.

01:36A higher minimum wage guarantees many people a higher income.

01:42But it also helps the economy as a whole, as it makes the economy more dynamic.

01:47It increases demand and productivity as well.

01:50A higher minimum wage certainly strengthens the purchasing power of those who earn it.

01:58But we have to be clear about the fact that it also increases prices for goods and services

02:03produced or provided by those people who are actually earning that minimum wage.

02:09Like the haircuts at Cutman for example.

02:13They would go up in price and the salon fears that customers might cut back on visits.

02:18And there're that way.

02:19Thank you very much.

02:20Bye.

02:21Bye.

02:22Bye birthday too.

02:23Bye bye.

02:24Bye friends.

02:25Bye bye.

02:27Bye bye, assistants.

02:28Huw necesuuu.

02:29Bye bye.

02:30Bye bye.

02:32Bye bye.

02:33Bye bye.

02:38Bye bye bye.

02:44Bye bye.

Category

Transcript

Recommended