The minimum wage in Germany was increased from €10.45 to €12 per hour as of 1 October 2022. In the run-up to this increase, enterprises were asked about the proportion of their employees that earned an hourly wage of less than €12. Ultimately, it is the 30% of firms that paid at least one employee less than €12 per hour that should be directly affected by the increase in the minimum wage.
There are considerable regional differences in the impact of the minimum wage increase to €12 per hour as of 1 October 2022. While only 8.6% of enterprises in the south of Germany (Bavaria and Baden-Württemberg) have to pay more than 20% of their employees the higher minimum wage, 14.6% of enterprises in the eastern federal states (Berlin, Brandenburg, Saxony, Saxony-Anhalt, Thuringia) are required to do so.
Around 40% of enterprises expected an increase in total staff costs as a result of the increase in the minimum wage. The remaining 60% of enterprises expected staff costs to change only slightly or not at all. The impact of the minimum wage increase on the employment of low-skilled workers was initially assessed as minimal. The majority of enterprises (around 80%) expected that this would not significantly change the number of low-skilled workers or the number of hours that they worked. Although around 10% of enterprises expected a decline in this regard, nearly as many enterprises expected an increase in the employment of low-skilled workers.
