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COST OF LIVING

A quarter of workers in Germany ‘earn less than €14 an hour’

Almost every fourth employed person in Germany earns less than €14 per hour. Could low wages be putting a squeeze on pension funds - and should salaries rise to keep up with inflation?

Published: 26 July 2023 16:29 CEST
Updated: 27 July 2023 09:13 CEST
A wallet filled with euro coins.
A wallet filled with euro coins. Photo: picture alliance / dpa | Daniel Karmann

A total of 23.35 percent of people employees Germany, or 9.3 out of 39.8 million, earn less than €14 an hour, according to new figures published at the request of the Die Linke (Left Party) faction in the Bundestag. 

Around 14.8 percent of employees in Germany are particularly low earners, as they only bring in the minimum wage of €12 an hour.

In light of the figures, Linke chairman Dietmar Bartsch called for an increase in Germany’s minimum wage.

“If every fourth person in Germany earns less than €14 per hour, the wage level in Germany is clearly too low,” he said. “A €14 minimum wage would now be necessary – also to compensate for inflation.”

Though the steep rises in the cost of living have slowed slightly in recent months, inflation is currently at around 6.1 percent and peaked at over 10 percent last year. 

A new minimum wage for Germany?

Fulfilling an electoral pledge of the Social Democrats (SPD), Germany’s coalition government increased the minimum wage to €12 last year. 

At the end of June, the Minimum Wage Commission proposed increasing the minimum wage to €12.41 per hour as of January 1st, 2024 and to €12.82 at the beginning of 2025. 

But in the face of inflation and rising costs of living, Bartsch called such an increase a “dramatic loss in real wages”.

In June, Stefan Körzell, a board member of the German Trade Union Confederation (DGB) and a member of the Minimum Wage Commission, criticised the proposed minimum wage increase, stating that a “mere cent-range adjustment” was unacceptable.

Körzell argued that the nearly six million minimum wage workers would suffer a significant real wage loss and emphasised that the minimum wage should have been raised to at least €13.50 to provide adequate protection and to offset inflation.

READ ALSO: Why Germany’s proposed minimum wage increase has been called a scandal 

A pension problem?

Bartsch added that low wages will mean than many people don’t have enough to live on when they reach retirement age, which currently varies based on age. For those born after 1967, it’s set to go up to 67 years.  

“The low wage level will also backfire on us when it comes to pensions,” he said.

There is a risk of “millions of cases of old-age poverty”, said Bartsch, pointing out that Germany’s pension fund is already losing many billions due to low wages.

There are currently around 21 million pensioners in Germany, making up a quarter of the population – and according to the Federal Office of Statistics, the largest cohort of workers is currently aged 55-60. By 2035, most of these working adults will be 70 or over.

While working-age people currently outnumber pensioners by a ratio of three to one, this is expected to narrow to three to two by 2060. 

Soon more people than ever will be withdrawing from the pension pot, and it’s unclear whether the contributions of working-age people will be able to keep up.

READ ALSO: How long do you have to work to receive a German pension?

Vocabulary

Minimum wage – (der) Mindestlohn 

Low wages – (die) geringe Löhne

Old-age poverty – (die) Altersarmut

Inflation – (die) Inflation/(die) Teuerung

Pension fund – (die) Rentenkasse

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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BERLIN

Zurich versus Berlin: Which German-speaking city is better to live in?

After Swiss-born Eurovision winner Nemo told reporters he preferred Berlin to Zurich, we compare the two European cities, taking in living costs, quality of life factors, and cultural highlights.

Published: 13 May 2024 17:22 CEST
Zurich versus Berlin: Which German-speaking city is better to live in?

Nemo, who took the top prize in the Eurovision song contest at the weekend, comes from the small town of Biel in the canton of Bern in Switzerland, but splits their time mostly between Zurich and Berlin, German news outlet Tagesspiegel reported on Monday.

Both major cities in central European countries with German-speaking populations (although of course in Zurich the dialect is Swiss-German or Züritüütsch), Zurich and Berlin have some obvious similarities. On the other hand, Zurich has been ranked the world’s most expensive city for years, whereas Berlin maintains a reputation for being affordable and a hub for arts and culture – still managing to hang onto its reputation as “poor but sexy”.

Of course affordability is just one of many factors that make a city attractive to its residents, and both Zurich and Berlin have a lot to offer.

The Local takes a look at some key stats and lifestyle differences to offer a comparison of the two cities.

‘A creative city that is constantly changing’

According to the report inTagesspiegel, Nemo called Berlin their “secret favourite” compared to Zurich, adding: “I love Berlin so much because it’s such a creative city that is constantly changing.”

Coming from a 24-year-old singer, it’s perhaps no surprise that Berlin was their top choice. Germany’s political capital has also long been known as a capital of arts, culture, and radical acceptance.

Nemo said as much in their comments: “Berlin lets you be who you are. It’s a city that’s fun.”

Nemo at the airport

Nemo arrives at Zurich Airport in Kloten after winning the final of the Eurovision Song Contest (ESC) 2024. Photo: picture alliance/dpa/KEYSTONE | Walter Bieri

As a non-binary person, Nemo likely also enjoys Berlin’s notorious inclusivity. With loads of LGBTQ+ clubs and events, as well as specific events for virtually every demographic imaginable, Berlin prides itself on being a place where residents can do and be as they like.

But that’s not to say that Zurich is so close minded. In fact, the Swiss capital also boasts the best quality of life for the LGBTQ+ community, as well as older people, in all of Europe.

But if you’ve already grown beyond your twenties, you probably want to consider a few factors beside a city’s party scene before you consider moving there. Especially for people looking for a place to settle down, factors like cost of living or availability of work become more important.

Cost of living

As mentioned above, Zurich consistently ranks as the world’s most expensive city to live in. 

Berlin, on the other hand, is very affordable, compared to many major cities in Europe.

According to the site Numbeo, which gathers user-contributed data on cost of living across the world, as of May 2024 most living expenses are about 40 percent lower in Berlin than in Zurich.

However, local purchasing power is nearly 30 percent lower in Berlin according to the same data, which suggests that most Zurich residents don’t mind the city’s high price tag because they take home larger salaries.

Quality of life statistics

It’s not only the costs that are high in Zurich. In fact, one thing that might be higher is residents’ satisfaction with where they live.

According to the 2023 Report on the Quality of Life in European Cities, published by the European Commission, Zurich out ranked 82 cities across Europe in most quality of life metrics.

With 97 percent of survey respondents saying they were satisfied with Zurich, it was the highest ranked city, just ahead of Copenhagen in Denmark and Groningen in the Netherlands.

More than 90 percent of Berlin residents were satisfied with their city, which is a respectable score, but was less than the nearby city of Leipzig.

In particular, Zurich residents tend to be happy with their jobs, public transport, healthcare services, air quality, and their finances.

Interestingly, Berliners came in one point higher than people from Zurich on job satisfaction.

One aspect of life where residents marked Berlin quite poorly: “The time it takes to get a request solved by a city’s local public administration”, with a satisfaction rate of 39 percent.

READ ALSO: ‘I’ve waited four years’ – Foreigners in Berlin furious over German citizenship delays

Rave the Planet

The ‘Rave the Planet’ techo parade in Berlin in July 2023. Photo: picture alliance/dpa | Fabian Sommer

Where do the trains run on time?

One thing that Nemo admitted they don’t like about Berlin was the number of strikes.

“What really annoys me is that you can never be sure when you will arrive somewhere because there are so many strikes,” Nemo told the German Press Agency. “That’s why I’ve now bought a small scooter to get from A to B faster.”

Fortunately for Nemo and Berliners alike, transportation strikes have simmered down, at least for now, as most of Germany’s bigger transportation workers’ unions have reached agreements with their respective employers.

That said, delayed trains and buses are not an uncommon occurrence in Berlin, and across Germany trains are delayed much more often than in Switzerland.

In fact, in 2023, Swiss media pointed out that eight of ten of the country’s most often delayed train routes actually came in delayed from Germany. 

READ ALSO: German trains ‘responsible for Switzerland’s worst delays’

Other similarities and factors to note

One more commonality between Zurich and Berlin – they’re both international urban centres, attracting foreign residents from around the globe.

READ ALSO: IN NUMBERS – Zurich’s foreign population climbs to record high

While the influx of foreign residents certainly makes both of these cities more flavourful and interesting, it also comes with a major downside. Both cities are suffering from a shortage of housing.

According to Switzerland’s Federal Statistical Office, in Zurich only 0.06 percent of apartments were vacant in the summer of 2023. In Germany’s popular cities know the situation is not much better.

Home to around 1.4 million residents, Zurich is less than half the size of Berlin in terms of population. And according to World Population Review, it is a bit more dense as well, with approximately 4,700 residents per square kilometre as opposed to Berlin’s 3,800.

Famously built in former swampland, Berlin’s surroundings are flat and partially forested with an abundance of lakes in the surrounding region. The Spree River flows the through the city centre, and is connected a series of urban canals. 

Zurich, on the other hand, is set between wooded hills, just north of the Alps. It’s 408 metres above sea level and much of the city follows the Limmat River, which flows out of the lake that shares its name with the city.

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