Minimum Wage Soars: A Two-Step Increase to €14.60 Per Hour by 2027
Wage increase in two stages to €14.60 set for implementation.
Get ready, Germany! The Minimum Wage Commission's jaw-dropping decision is sending shockwaves through the industry and the political arena. Here's the lowdown on what's happening.
Starting from January 1, 2026, the minimum wage is set to skyrocket from the current €12.82 to €13.90 per hour. The party doesn't stop there; come January 1, 2027, it'll surge yet again to a whopping €14.60 an hour! This colossal jump represents roughly a 14% increase over the staggering 18-month period from early 2026 to early 2027[1][2][3][5].
Since its inception in 2015 at a humble €8.50 per hour, the minimum wage has seen a steady upturn, experiencing ten hikes so far[5].
The Political Backdrop
During the heated 2025 election campaign, the Social Democratic Party (SPD) Crystallized the €15 minimum wage by 2026. Following the formation of a coalition government with the CDU, their agreement aimed to achieve €15 an hour but stopped short of the mark, opting for gradual increases instead[2][5].
Who Does the Minimum Wage Affect?
The minimum wage isn't just for full-time workers, people! It's applicable to everyone in Germany over 18, including part-timers, seasonal workers, foreign workers, and those in marginal employment types (mini and midi jobs)[2].
The Response from Different Camps
- Trade Unions: Union folk tend to be vocal supporters of higher wages, actively lobbying for the €15 target. They argue that wage increases haven't kept pace with rising inflation and living costs, particularly housing rates[4][5].
- Employers: Some employers fear the looming labor costs, anticipating potential pressures to accelerate automation and pivot business models. There's apprehension about the impacts on competitiveness and cost structures, with some sectors already investing in automation to offset wage pressures[4].
- The Minimum Wage Commission, a confab of union representatives, employers, and an independent chair, balances interests when deciding wage adjustments every two years based on wage trends and economic conditions[5].
In essence, the minimum wage in Germany is on the climb, surging from €12.82 to a stunning €14.60 per hour by 2027 in two increments. This monumental decision, a compromise between political aspirations, economic realities, and the interests of both employees and employers, has trade unions pushing for more, while employers brace for increased costs and potential shifts in labor use[1][2][3][4][5].
The significant increase in the minimum wage, from €12.82 to €14.60 per hour by 2027, is not onlyDrawing attention from the industry but also the political arena, particularly the division between trade unions pushing for a higher target and employers bracing for increased costs and potential shifts in labor use. Furthermore, the adoption of policies such as the community policy and employment policy will play crucial roles in addressing the financial implications and fostering a balanced business environment during this transition period.
