German retail companies are sounding the alarm over possible negative consequences of a sharp increase in the legal minimum wage. According to a new survey by the German Retail Association (Handelsverband Deutschland, HDE), two-thirds of companies surveyed fear job losses if the minimum wage rises significantly.
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Friedrichstraße, a shopping street in the eastern part of Berlin.
A total of 550 retail companies participated in the survey. The results show that large retail chains in particular fear laying off staff due to rising wage costs. 'After three consecutive years of economic contraction, the sector can no longer bear additional costs,' HDE chairman Alexander von Preen stated. 'What is worrying is that even large companies now expect shrinkage in their workforce, while they represent the vast majority of Germany's 3.1 million retail jobs.'
The HDE therefore advocates suspending the planned adjustment of the minimum wage. Von Preen: 'We need a zero increase. If the minimum wage rises, wages in higher pay scales must also rise with it to maintain the difference. That creates a much bigger financial impact than just the increase at the bottom of the wage scale.'
The survey further shows that 84 per cent of companies expect tensions in the workplace if wage differentiation between easy and more demanding jobs disappears. A whopping 92 per cent state that social security contributions should not rise further.
The HDE calls on the government not to impose additional burdens on the retail sector - as a staff-intensive sector - and to protect jobs. 'The increasing politicisation of the minimum wage must stop,' Von Preen said. 'If wages become a plaything of political competition, the system of collective bargaining is at risk.'
More information:
Handelsverband Deutschland
www.einzelhandel.de