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German parliament approves minimum wage hike promised by Scholz

Germany’s parliament on Friday approved raising the country’s minimum wage to 12 euros ($12.84) an hour, fulfilling a key campaign pledge Chancellor Olaf Scholz made ahead of the US elections. last year.

The increase of nearly 15% will come into effect on October 1. According to the government, some 6.2 million people in Germany currently work for less than 12 euros per hour.

Germany was slow to institute a national minimum wage. It was introduced in 2015 at the insistence of the center-left Social Democrats of Scholz, who at the time were junior partners in Chancellor Angela Merkel’s conservative government.

The minimum wage was initially set at 8.50 euros per hour. A commission responsible for overseeing these wage increases, which includes representatives of trade unions and employers, then approved an increase to the current 9.82 euros. This will rise to 10.45 euros on July 1 before reaching a minimum of 12 euros three months later. The commission will continue to make revisions.

Scholz has long advocated for an increase to 12 euros and made it a key part of his campaign last September, presenting it as a matter of fairness and “respect”.

Labor Minister Hubertus Heil told parliament the October 1 wage hike could be the biggest ever seen by as many as 6 million Germans, including many women and workers in eastern Germany. Germany. Much of the formerly Communist East remains less prosperous than West Germany more than three decades after reunification.

The wage hike comes amid a surge in inflation that followed Russia’s invasion of Ukraine. Germany’s annual inflation rate hit 7.9% in May, according to an official estimate this week, the highest rate since the winter of 1973-74.

On Wednesday, Scholz said he wanted to join employers and unions in “concerted action” to find ways to cushion the effects of rising prices while preventing an inflationary spiral in Europe’s biggest economy.

The Independent Gt

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