A significant proportion of new hires in Germany are expected to be affected by the planned increase in the statutory minimum wage to €13.90 per hour, according to a study released Tuesday by the Institute for Employment Research (IAB).
The research indicates that approximately 13 percent of new employment contracts in 2023 fell below this threshold. This represents a considerably higher proportion than the overall workforce; roughly five percent of all existing employment relationships are currently impacted by wages below the proposed minimum.
The effects are particularly noticeable in part-time positions, where 16.7 percent of new hires earn less than €13.90, compared to 11.9 percent of new full-time employees.
“Businesses tend to adjust employment levels by reducing new hires rather than issuing terminations, making it crucial to understand the impact on new contract terms” stated IAB researcher Martin Popp.
Regional discrepancies are also evident, with 14.7 percent of new hires affected in eastern Germany, compared to 12.6 percent in western Germany. Industries facing a disproportionate impact include agriculture and forestry, as well as the hospitality sector, where over half (53.2 percent) of new hires currently earn below the planned minimum wage. The energy supply sector also demonstrates a significantly higher share (24.1 percent) impacted by the change.
The study’s findings are based on data from the IAB employment survey and the wage survey conducted by the Federal Statistical Office.