The German government will increase the country's minimum wage in 2026 and 2027, following the recommendations of an independent commission.

The minimum wage is currently €12.82 an hour and should be increased to €13.79 in 2026 and then to €14.60 in 2027, the report of that commission recommended at a press conference.

The decision was taken "unanimously" by employers' and workers' representatives, said the body's chairwoman Christiane Schoenefeld, quoted by AFP.

The increase will take effect from 1 January 2026, said Social Democrat Labour Minister Berbel Bass.

However, the commission disagreed with her party, which wanted an increase in the minimum wage to 15 euros from 2026, a threshold defined as "achievable" in the coalition agreement originally negotiated between the Social Democrats and Chancellor Friedrich Merz's conservatives.

However, the conservatives have agreed that the specific minimum wage should continue to be set by this independent commission.

Schoenefeld welcomed the "consensual decision" despite "political pressure" and "very difficult conditions" "given the stagnation of the economy and uncertain forecasts".

After two consecutive years of recession, several economic institutes are forecasting a weak recovery in growth in 2025.

GDP developments will depend, inter alia, on private consumption, which is struggling to recover, while the trend towards household saving remains resilient.

From January next year, around 6 million workers will receive around €190 gross more per month, and from 2027 a further €120 gross.

This increase represents a gross increase of 13.9% for minimum wage employees over two years.

"You can assume that this money will go directly and entirely to consumption, which will permanently support the economy," assured Stefan Kampeter, President of the Federation of German Employers' Organisations (BDA).

"Although it did not come to €15, this is a significant financial improvement for workers in the low-wage sector," welcomed the service union ver.di, represented in the minimum wage committee.

In 2022, former Social Democratic Chancellor Olaf Scholz ignored this commission and increased the minimum wage above its recommendations. | BGNES