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WORKING IN GERMANY

‘Far too low’: How millions of workers in Germany are earning less than €14 per hour

Germany is known for being a country of well-paid workers. But new statistics from the government reveal that more than eight million people are taking home less than €14 per hour, prompting fresh calls to raise the minimum wage.

Published: 29 April 2024 15:49 CEST
A restaurant worker in Germany
A restaurant employee cleans benches in Baden-Württemberg. Photo: picture alliance / Sebastian Gollnow/dpa | Sebastian Gollnow

“Good work deserves a decent wage – that’s just about respect,” wrote the centre-left Social Democrats (SPD) in their election campaign back in 2021. 

When Olaf Scholz’s party entered government as the largest partner in the traffic-light coalition, one of their flagship pledges was to bump up the minimum wage to €12 per hour – a major increase from the previous €10.45.

The SPD kept their promise and on October 1st, 2022, the €12-per-hour minimum wage came into force in Germany. 

Just 18 months later, however, there are once again rumblings of dissatisfaction as left-wing parties call for another hike in wages for the lowest paid in Germany.

What do the lowest workers earn in Germany – and where do they work?

Currently, more than eight million workers – amounting to around 10 percent of the population – earn less than €14 per hour in Germany.

According to the Labour Ministry, around 8.4 million people were employed at hourly wages below €14 as of April 2023, with around 7.1 million of them in the western states. 

The proportion of these workers is particularly high in the hospitality industry, with 65.8 percent of workers in cafes, bars and restaurants earning less than €14 per hour. According to the latest data, 1.1 million employees in this industry fell below the €14 threshold. 

In retail, the number of workers earning below €14 per hour was even higher at 1.6 million. Meanwhile, in the service sector, 45 percent of the some 1.46 million workers fell into this bracket. 

The data on low earners was released in response to a parliamentary question from the left-wing Linke party and was first reported on by Spiegel on Monday. 

Following an increase at the start of the year, the current minimum wage is set at €12.41. However, €14 is a significant benchmark because it represents 60 percent of the median wage in Germany. According to an EU directive, the national minimum wage should be no less than this figure. 

READ ALSO: Minimum wage violations on the rise in Germany – Are you getting paid enough?

Why is the minimum wage such a heated issue?

Workers in Germany are in many ways facing a perfect storm right now. 

In the months it took for the SPD to bring in the €12 minimum wage, an energy crisis brought on by Russia’s war on Ukraine had sent prices spiralling in Germany.

In 2022, the cost of living rose by a staggering 6.9 percent compared to the previous year, dropping off just slightly to 5.9 percent in 2023. 

Though inflation has tailed off in recent months, employees are still facing prices of everyday goods that are in some cases double what they were just a few years ago.

Groceries lie on the conveyor belt at the checkout in a supermarket in Bavaria.

Groceries lie on the conveyor belt at the checkout in a supermarket in Bavaria. Photo: picture alliance/dpa | Sven Hoppe

At the same time, economic uncertainty has made employers reluctant to increase wages, and those on minimum wage have only had modest pay increases over the past few years.

Last year in June, Germany’s minimum wage commission proposed an increase of just 41 cents each year for this year and next, bringing the minimum wage up to €12.41 at the start of January 2024 and up to €12.82 in January 2025. 

At the time, the decision was described as “scandalous” by labour experts and trade unions, who slammed the fact that the tiny increase would amount to a real-terms cut in wages for the lowest earners. 

There was also tough criticism over the fact that the decision by the minimum wage commission had not been unanimous.

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

How is the minimum wage decided in Germany?

Since the statutory minimum wage was established in Germany back in 2005, a committee called the Minimum Wage Commission (Mindestlohnkommission) has been responsible for making recommendations on how high it should be. 

This committee consists of three employer representatives and three worker representatives who vote on the proposed changes, as well as two government-appointed advisors who don’t have voting rights.

Every two years, the commission decides on adjustments to the minimum wage for the next two years, and these proposals are then approved by the government. 

Controversially, the latest proposals from the Minimum Wage Commission didn’t receive unanimous approval, with the employee representatives on the panel claiming to have been outvoted.

This has recently led to calls from SPD co-leader Saskia Esken for the rules to be changed so that decisions by the commission can only be reached by consensus. 

READ ALSO: What are Germany’s top-paying jobs?

What proposals are on the table for the minimum wage?

Though the SPD haven’t united on a figure for the coming years, numerous voices in the party have spoken out in favour of a significant increase for low-paid workers.

Speaking to RND on Wednesday, Esken described the current increases as “far too low” and stated that the next minimum wage “must definitely be high enough to ensure that single people can live on it without falling into poverty if they have a full-time job”. 

This echoes calls from SPD co-leader Lars Klingbeil for a “significant increase” in the minimum wage next time around.

SPD co-leader Lars Klingbeil speaks at an EU election event in Hamburg.
SPD co-leader Lars Klingbeil speaks at an EU election event in Hamburg. Photo: picture alliance / Sebastian Gollnow/dpa | Sebastian Gollnow

Going one step further, Petra Köpping, the leading SPD candidate in Saxony, suggested a minimum wage of at least €15 per hour.

Meanwhile, the leftwing Linke party wants the government to change the law so that the national minimum wage can’t fall below 60 percent of the median salary, which currently amounts to €14 per hour.

An EU directive on fair wages that must be implemented in Germany by November 15th, 2024, suggests that the minimum wage should be set at least 60 percent of the median salary, and that collective bargaining agreements should cover at least 80 percent of the workforce. 

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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 ten 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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