The German government has approved a significant increase in the country’s minimum wage, raising it to 14.60 euros per hour in a two-stage process. This marks the largest hike since the introduction of a minimum wage in Germany a decade ago. The first increase will bring the minimum wage to 13.90 euros at the start of next year, followed by a further rise to 14.60 euros per hour on January 1, 2027.

According to Labour Minister Baerbel Bas, the increase will benefit millions of employees, providing them with noticeably higher wages for their work. Bas also noted that companies will have the opportunity to spread the rising costs over two years, making the transition more manageable. The labour ministry estimates that approximately six million workers in Germany will be affected by the increase.

The two-stage increase was recommended by an independent commission that oversees Germany’s minimum wage. This commission, comprising economists, trade union leaders, and representatives from business and employer groups, was established when Germany first introduced a statutory minimum wage in 2015. While the approved increase falls short of the 15 euros per hour minimum wage discussed in the coalition agreement between Chancellor Friedrich Merz’s conservative CDU/CSU bloc and the centre-left Social Democrats (SPD), it represents an important step towards greater fairness and recognition for workers.

The hike is seen as a significant move towards addressing income inequality and recognizing the contributions of low-wage workers. Despite not meeting the targeted 15 euro minimum wage by 2026, as outlined in the coalition agreement, the increase demonstrates the government’s commitment to improving working conditions and wages for millions of employees. The decision is expected to have a positive impact on the lives of many workers in Germany, and its effects will be closely monitored in the coming years.