German minimum wage among lowest in region

Although minimum wages have grown across the EU, Germany ranks among the lowest for western European countries, a report on Thursday revealed.

Produced by the Hans-Böckler Foundation’s Institute of Economic and Social Research (WSI), the report showed that Germany came in second last place at €9.19 ($10.36) per hour — even after a 35-cent increase earlier this year.

It was defeated only by the UK, where the minimum wage of £7.83 now equates to €8.85, albeit partly as a result of the pound weakening since the referendum vote to leave the EU.

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Although wages in Germany were higher than many southern and eastern European states, workers were still vulnerable to poverty. The minimum wage, which would equate to around €1,146 per month after taxes and social contributions, barely stood above the poverty line and only made up around 48 percent of the national median income.

In comparison, countries like Turkey offered a minimum wage of almost 74 percent of median national income. In Portugal, the figure is 61 percent. 

Even though Germany has a reputation for relatively cheap rent and living costs by western European standards, its minimum wage seemed to lag behind.

As a result,one in five Germans were at risk of poverty or social exclusion.

According to the WSI report, minimum wage growth did average some 2.7 percent across 22 EU states, but growth was slow in western European states.

Earlier this year, Labor Minister Hubertus Heil announced that Germany would work towards a bloc-wide minimum wage when it takes up EU Council presidency in 2020. This could put Europe on the path towards one of its 2020 goals, which is to lift over 20 million people out of the risk of poverty.

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"Overall, a trend towards significantly higher wage increases has been observed in the EU for several years now, and this has continued in 2019," WSI research scientists Professor Dr. Thorsten Shulten and Dr. Malte Lübker wrote.

Growth was especially strong in the southern and eastern states. In Greece, the minimum wage rose for the first time in seven years to €3.76. Spain's minimum wage rose 11 percent to €5.45.

Read more: EU slashes 2019 growth forecast

The report noted that although Austria, Italy and the Nordic countries had no minimum wage, there was a high level of collective bargaining. This meant that wage floors were "generally above the statutory minimum wage in Western Europe."

Germany was relatively late in adopting a country-wide minimum wage, introducing it in 2015 over a two-year period.