5.8 million jobs benefit from minimum wage increase

Following the increase in the minimum wage to 12 euros on October 1, 2022, the income of affected employees will rise by a total of around 480 million euros, which corresponds to an increase of 9.6%.

Wiesbaden - The publication by the Federal Statistical Office states that around 5.8 million jobs in Germany will be affected by the increase in the minimum wage on October 1, 2022. Before the minimum wage increase, around 14.8% of all employees in Germany earned less than €12 per hour. The data was determined using the July 2022 earnings survey. If these 5.8 million jobs now receive the minimum wage, this will mean a 9.6% increase in income for the workers concerned, equivalent to around €480 million.

According to an EU directive, the minimum wage should be 60% of median earnings, measured by the so-called Kaitz index. However, this index only takes into account full-time employees. In October 2022, the median gross hourly earnings for full-time employees in Germany entitled to the minimum wage was 21.29 euros. The minimum wage of 12 euros thus corresponded to a share of 56.4%. If all employees entitled to minimum wage are taken into account, median earnings fall to 18.94 euros, and the minimum wage corresponds to a share of 63.4%.

Women and East Germans benefit more than average

It turns out that women are affected by this increase more often than average, about 18% compared to about 12% for men. There are also differences between eastern and western Germany: Around 18% of employees in eastern Germany are affected, compared with only 14% in western Germany. The impact also varies by state. Saxony-Anhalt has the highest proportion of affected employment at 18.6%, while Baden-Württemberg has the lowest at 12.6%. The hospitality industry is particularly hard hit, with 48%, and agriculture, forestry and fishing, with 41%.

The increase in the minimum wage has significantly reduced the low-wage sector in Germany. In October 2022, one in seven employees (15%) worked in the low-wage sector, a reduction of 1.5 million jobs compared with April 2022. There was a particularly positive impact on the "provision of other economic services," "hotels and restaurants," and "agriculture, forestry, and fishing" sectors, although the share of low-wage jobs in these sectors is still high.

Further background information and methodological notes can be found at the corresponding publication of the Federal Statistical Office.