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EXPLAINED: Who will benefit from Germany’s minimum wage hike?

Germany's new €12/hour minimum wage, which came into force on October 1st, is set to benefit more than six million people. We look at exactly who is going to be helped by the €1.55/hour increase.

Published: 2 October 2022 19:01 CEST
Social Democratic Party General Secretary Kevin Kuehnert addresses a press conference in front of a placard showing German Chancellor Olaf Scholz and the words 'Now vote for 12 Euro minimum wage - promise kept' 
Social Democratic Party General Secretary Kevin Kuehnert addresses a press conference in front of a placard showing German Chancellor Olaf Scholz and the words 'Now vote for 12 Euro minimum wage - promise kept'  in Berlin ahead of the introduction of the new minimum wage from October 2022. Photo: Tobias SCHWARZ / AFP

How much has the minimum wage risen by?
As of October 1st, the minimum wage now stands at €12 per hour, up from €10.45 previously, i.e. an increase of almost 15 percent.

How many people are going to benefit from the increase?
According to the Hans Böckler Foundation’ Institute of Economic and Social Research (WSI), a trade union-linked research foundation, there are at least 6.64 million people who were earning less than €12 per hour before the increase. This includes 3.5 million women and 2.7 million men.

Will this mainly benefit people in full- or part-time work?
If we look at the number of hours worked, we can see the following picture: 1.4 million full-time employees will get a boost to their earnings, and 1.8 million part-time staff and three million people with so-called ‘mini-jobs’ will earn more per hour. A mini-job is where you can either earn a maximum monthly sum or work for no more than three months/70 days per year. Those who only have a mini-job don’t have to pay social security contributions.

The upper earnings limit for people with mini-jobs also rose on October 1st. People can now earn a maximum of €520 per month, up from €450/month previously. 

READ ALSO: The rules in Germany around mini and midi jobs

Does the increase have anything to do with the current energy crisis?
No. The coalition government had already planned this before Russia invaded Ukraine and the resulting energy crisis. After the Bundestag (lower house of parliament) passed the draft law on June 3, 2022, it was confirmed by the Bundesrat (upper house) on June 10 where concerns about the cost-of-living crisis played a key role in the final debate. At that time, several politicians warned that spiralling energy prices and inflation were making many people’s living situations untenable. The government has since introduced other initiatives to help people cope.

READ ALSO: Wohngeld: How people in Germany can get help with rising living costs

In which sectors will the increase have the biggest impact?
More than 60 percent of people working in the hospitality sector will be affected by the increase. According to government data, 46 percent of those working in the agricultural and forestry sector were earning below €12/hour. Thirty-two percent of those in the property sector and 29 percent in the transport and warehousing sector also earned less than the minimum wage.

What are trade unions and employers’ associations saying about the hike?
The German Trade Union Confederation (DGB) has been pushing for an increase for a long time. DGB head Stefan Koerzell recently called the step “a ray of hope in these difficult times”. But the Confederation of German Employers’ Associations’ BDA called Labour and Social Affairs Minister Hubertus Heil’s draft law for the increase of the minimum wage “extremely questionable” from a political and legal perspective. The BDA’s criticism was not targeted at the increase itself, but rather the fact that it was the legislator who was deciding on wage increases instead of employers and trade unions.

What role do trade unions and employers’ associations play when it comes to the minimum wage?
Normally a big one – they sit on the minimum wage board. This committee normally proposes the incremental increases for the base hourly salary, which was introduced in 2015 – it then stood at €8.50. The new legal increase to €12 is outside of this usual mechanism, but the coalition government has promised that after this, the minimum wage commission will be responsible for future increases once again. 

READ ALSO: Everything that changes in Germany in October 2022

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GERMAN CITIZENSHIP

How much do you need to earn to qualify for citizenship in Germany?

Applicants for German citizenship need to be able to support themselves financially, but it's often unclear what that means in practice. Here's how to work out if your income is high enough for citizenship.

Published: 15 May 2024 15:29 CEST
How much do you need to earn to qualify for citizenship in Germany?

Out of the requirements for qualifying for a German passport, supporting yourself financially is one of the most important – and one of the most confusing.

Many foreigners assume that the authorities have a magic number in mind and will often worry about whether their income is above or below this threshold.

In reality, though, the law is much more flexible. In section 10 of the nationality law, it states that applicants must show that they “can support themselves and their dependent family members without claiming benefits under the Second or Twelfth Book of the Social Code.”

In other words, that your income is healthy enough to not rely on the state for things like long-term unemployment benefits.

According to Fabian Graske, an immigration lawyer at Migrando, around €1,500 gross per month for a single person is usually considered enough to live on. 

That said, there isn’t really a one-size-fits-all approach to this quesiton. 

When it comes to working out if your income is high enough, you’ll need to take into account a number of factors that your case worker at the naturalisation office will also weigh up. 

That’s why it’s important to ask yourself a number of questions that go beyond just how much you earn: 

How high are your living costs? 

In Germany, there are huge regional differences in the cost of living, so what someone can afford to live on varies hugely from place to place.

For example, someone living in pricey Munich is likely to need much more money for rent or their mortgage than a resident of much more affordable places like Halle or Leipzig, so you should consider whether what you earn is enough to offer a basic standard of living in the city or town you live in. 

READ ALSO: Requirements, costs and permits – 6 essential articles for German citizenship

It is worth mentioning, though, that what you actually pay for rent and bills matters more than the averages. If you’re lucky enough to find an apartment with unusually low rent in Berlin, for instance, you can probably get away with earning less money as well. 

Are you single or do you have a family?

If you’re single and have no children, you’ll likely get a lot more lenience from the authorities when it comes to having a lower-than-average income.

A family sit at a lake.

A family sit at a lake in Bavaria. Image by Eva Mospanova from Pixabay

Of course, if you have dependents such as kids or a spouse who doesn’t work (or both), you’ll need to ensure not only that your own living costs are taken care of, but also that your family can survive on your income alone.

That naturally means you’ll be expected to earn a certain amount more for each dependent child or adult.

On the plus side, any income your spouse does earn will be counted alongside your own, so if you’re the one who is supported by their partner, the authorities will also take this into account. 

Is your job stable or unstable?

One key thing to think about when applying for citizenship is the security of your work contract. Someone who has a long-term contract with an employer and has passed their probationary period will be in a much better position than someone who is still on a three-month trial, for example.

This doesn’t mean you shouldn’t submit a citizenship application after just starting a new job, but be aware that the authorities may well wait to process your application until you’ve passed the initial probation and have been put onto a longer-term contract. 

A similar rule of thumb applies to people who are currently claiming Arbeitslosengeld I (ALG I), or unemployment insurance. Though this doesn’t disqualify you from citizenship, it may delay your application until you can find a stable job. 

READ ALSO: Can I still get German citizenship after claiming benefits?

Do you need to rely on welfare payments to get by?

A key aspect of German naturalisation law is working out whether you’re likely to be a financial burden on the state by relying too much on the welfare system.

The entrance to the Jobcenter in Düsseldorf,

The entrance to the Jobcenter in Düsseldorf, North Rhine-Westphalia. Photo: picture alliance/dpa | Oliver Berg

While everyone needs a helping hand from time to time, claiming benefits like long-term unemployment benefit (Bürgergeld) or housing benefit (Wohngeld) to top up your income sadly shuts you out of the naturalisation process and could also make it hard for you to qualify in the future. 

Luckily, this doesn’t apply to all types of state support – Kindergeld, ALG I and Bafög don’t count, for example – so seek advice from a lawyer or your local citizenship office if you’re unsure.

How old are you?

Though this is hard to fully quantify, age can sometimes play a role in assessments of your financial fitness in Germany.

A young person fresh out of university or vocational college may be seen as someone with high earning potential over the years, so in some cases the authorities may take a more relaxed approach to their current income.

In contrast, an older person coming to the end of their working life could be held to slightly stricter standards. 

This is also why it can be important to show that you have sufficient pension contributions or another form of security for the future, such as owning your own home or having lots of savings. 

READ ALSO: How can over 60s get German citizenship under the new nationality law?

What counts as ‘income’ under German law?

It’s important to note that income doesn’t just have to mean the salary you get at your job: income from rental properties, side hustles and freelance gigs can also be included, as well as things like alimony payments after divorce.

Once again, if you’re unsure, just ask. The citizenship offices are there to advise you and should give you clear instructions about what kind of documents count as proof of income in your application. 

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