In Germany's Former East, Trading Minimum Wages for New Jobs
Germany's decision to establish the country's first minimum wage, at €8.50 per hour, may lead to job losses in economically struggling parts of former East Germany, where consumer buying power remains weak.
Beginning in 2015, hotels and restaurants in the former East Germany must pay employees the legal minimum hourly wage of €8.50 ($11.49). But the law, as formulated by the federal minister of labor and social affairs, Andrea Nahles, allows industries that would be greatly affected to undercut the minimum until 2017.
While the hotel/restaurant industry association, know by its German acronym, DEHOGA, doesn’t question a legal minimum wage in the former West Germany, it warns of many job losses in the former East Germany because businesses there can’t afford to hire at that rate.
Want to keep reading?
Subscribe today, and get access to distinguished coverage of Europe’s leading economy, from its No. 1 name in financial news: Handelsblatt.