A new survey by the German Retail Association (HDE) has revealed deep concerns within the retail sector over the potential consequences of a significant increase in the statutory minimum wage. Two-thirds of the 550 retail companies surveyed expect a notable rise in the minimum wage to negatively impact employment, with many warning of impending job losses.
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'In the third consecutive year of recession, the retail sector can no longer shoulder further cost increases given tight margins and low reserves,' said HDE President Alexander von Preen. 'What is particularly alarming is that many large companies in the sector are now also expecting a reduction in employee numbers compared to the previous year. This is a disastrous finding after years of steadily rising employment figures in the retail sector, as the vast majority of the 3.1 million retail employees work for large companies.'
The HDE is calling for a suspension of the upcoming adjustment to the minimum wage. 'We therefore need a suspension of the minimum wage adjustment, i.e., a zero increase,' von Preen stated. He cautioned that wage hikes would not only affect the lowest pay groups: 'A further increase in the minimum wage will mean that wages in collective wage systems must be increased overall. After all, the wage gap to higher pay groups must also be maintained. This mechanism enormously multiplies the financial effect of a minimum wage increase.'
The survey also showed that 84 percent of companies fear increased internal conflicts if wage differentiation becomes impossible for simpler roles. Meanwhile, 92 percent of businesses say social security contributions must not rise further. 'Due to the poor overall economic situation in the industry and the rising cost of labour, the HDE is calling for large, highly staffed industries such as retail to be prevented from becoming overburdened and for employment not to be unnecessarily jeopardised,' von Preen warned.
The HDE reaffirmed its support for the independent Minimum Wage Commission, stressing: 'The increasing politicisation of the minimum wage must not continue under the new federal government; otherwise, it could be the nail in the coffin for collective bargaining policy. Wages and salaries must not become the pawn of political competition.'
More information:
Handelsverband Deutschland
www.einzelhandel.de