Germany's Minimum Wage to Rise to €14.60 by 2027, Narrowing East-West Gap
The minimum wage in Germany is set to rise to €14.60 per hour by January 2027, further closing the wage gap that has persisted between East and West Germany since reunification. This increase follows a narrowing of the gap by seven percentage points since 2014.
Currently, Hamburg boasts the highest hourly wage at €26.88, followed by Schleswig-Holstein at €22.15, and Mecklenburg-Vorpommern at €20.33. The process of equalizing wage levels across the country is largely complete, with many collective agreements now applying nationwide.
Despite this progress, significant wage differences between West and East Germany remain. In 2021, full-time employees in the west earned an average of €4,810 gross per month, compared to €3,973 in the east - a difference of around 17%. This disparity is not due to productivity differences; East German employees are not inherently less productive than their western counterparts.
The introduction of the minimum wage and collective bargaining agreements have been key factors in reducing the gap. However, collective bargaining coverage in the east is still lower at 41.7% compared to 50% in the west.
Thirty-five years after the fall of the Berlin Wall, income differences between West and East Germany continue to exist. The upcoming minimum wage increase aims to further reduce this gap, building on the progress made since 2014. The Hans-Boeckler-Stiftung, using data from the Federal Statistical Office and WSI, has been instrumental in tracking these changes.
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