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Business

German minimum wage 'moderate' in EU comparison

About a year after Germany introduced a statutory minimum wage, the policy has not become a job killer as its critics feared. One reason may be that it's well below those paid in other EU countries a study says.

In January 2015, Germany introduced a statutory minimum wage of 8.50 euros ($9.25) per hour, making the European economic powerhouse the 22nd country in the 28-nation EU to adopt such a wage policy. A survey released by the left-leaning Böckler Foundation on Monday said Germany's minimum wage was "moderate" and the lowest among Europe's biggest economies.

The survey found that the 8.50-euro minimum to be paid in Germany compared unfavorably with France's 9.67 euros, the Netherlands' 9.36 euros as well as the 9.15 and 9.23 euros paid in Ireland and the UK respectively.

While the German minimum wage remained the same last year and was likely to stay there in 2016, too, it rose by 4.6 percent on average in other EU countries, the survey said, leading to gains in workers' real incomes due to low inflation.

Böckler Foundation's wage expert Thorsten Schulten called for an increase in the German minimum wage, saying this could be an important measure in the fight against ultra-low inflation in Europe.

"If minimum wage policies were to make an essential contribution to counter fears of a deflation crisis, it would require much steeper rises in minimum wages across Europe," he said.

Schulten's call comes as an independent German panel setting the level of the minimum wage is discussing a rise by 0.30 euros to 8.80 euros, with the move planned to come into effect in 2017. It could even be slightly higher if Germany's metalworkers' union, IG Metall, manages to secure a pay hike of 5 percent, it demands in current wage negotiations. The German minimum wage is tied to general wage developments across all sectors of the economy.

uhe/ba (Reuters, dpa, EPD, Böckler Foundation)

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