A forthcoming increase in Germany’s statutory minimum wage to €13.90 per hour is projected to impact more than one in eight new social security-registered employment contracts. This finding stems from a study released Tuesday by the Institute for Employment Research (IAB).
According to the study, approximately 13% of new hires in 2023 earned below the €13.90 threshold. This figure is substantially higher than the overall proportion of existing social security-registered employment relationships affected, which stands at roughly 5%. The increase is particularly noticeable regarding part-time employment, where nearly one in six new hires currently earn less than €13.90. For full-time positions, the proportion is 11.9%.
“Businesses tend to adjust employment levels by reducing new hires rather than issuing terminations” stated IAB researcher Martin Popp. “Therefore, it’s crucial to understand the extent to which new hires are affected by the minimum wage increase.
Regional disparities are also evident. In eastern Germany, the proportion of affected new hires is 14.7%, compared to 12.6% in western Germany. The agricultural and forestry sectors, along with the hospitality industry, are particularly impacted, with over half of new hires (53.2%) presently earning below the planned minimum wage. The energy supply sector also exhibits a significantly higher proportion, at 24.1%, above the national average.
The study’s findings are based on data from the IAB job survey and the salary survey conducted by the Federal Statistical Office.
