Germany's Cabinet on Wednesday approved raising the country's minimum wage to 12 euros ($13.60) per hour in October, making good on a key pledge in Chancellor Olaf Scholz's election campaign last year.
Germany has had a national minimum wage since 2015. It was introduced at the insistence of Scholz's center-left Social Democrats, who at the time were junior partners in conservative Chancellor Angela Merkel’s government.
The minimum wage started off at 8.50 euros per hour, but a commission in which labor unions and employers are represented reviewed it regularly. The panel set the current level of 9.82 euros and a planned rise to 10.45 euros to take effect on July 1.
Scholz has long argued for a hike to 12 euros and made it a key plank of his campaign for Germany's election in September, which his party won narrowly.
“Many citizens of our country work a lot but earn little — that must change,” Scholz wrote in a tweet announcing the Cabinet decision. “For me, one of the most important laws and a question of respect.”
The wage increase still needs approval in parliament, where Scholz’s three-party coalition has a comfortable majority.
According to the draft legislation, some 6.2 million people in Germany currently work for less than 12 euros per hour.
After the one-time hike set for Oct. 1, the commission would again set further changes to the minimum wage.
Employers’ associations have complained that the increase endorsed by the Cabinet violates a principle that wage levels in Germany are set by employers and employee representatives.
The proposed increase comes as inflation in Germany and elsewhere has soared. Year-on-year inflation in the country, which has Europe's biggest economy, stood at 4.9% in January.
