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Rising minimum wage puts German retail jobs at risk

The German Retail Association (HDE) has expressed grave concerns following the Minimum Wage Commission's latest decision to raise the statutory minimum wage to €13.90 on January 1, 2026, and €14.60 on January 1, 2027. The HDE warns that this increase could lead to significant job losses in the retail sector, which has struggled with recession and stagnation for six years.

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'Setting the minimum wage is not social policy. Jobs must be profitable for employers in the private sector, otherwise they will disappear. The Minimum Wage Commission's decision puts numerous jobs in the retail sector at risk,' said HDE President Alexander von Preen.

Von Preen criticised the political interference in the lead-up to the decision, stating that the Commission should have paid greater attention to the sector's weak economic performance and potential job losses. 'In the private sector, wages are determined by the employer's financial performance and, above all, labour productivity,' he said. 'In Germany, however, securing a minimum subsistence level is the sole responsibility of state social policy, not that of the independent Minimum Wage Commission.'

Since its introduction in 2015, the statutory minimum wage has risen by 71.8 percent, including the new 13.9 percent increase. 'The minimum wage is rising much faster than collectively agreed wages and is eating ever deeper into the existing collective bargaining structures. This cannot continue in the long run. Collective bargaining autonomy is constitutionally protected for good reason,' von Preen emphasised.

He also warned that higher minimum wages could push prices up and damage competitiveness. 'In the end, there will only be losers. Employees' purchasing power will not increase, our country's competitiveness will suffer, and people now have to fear for their jobs,' von Preen said. 'Retailers cannot cope with such a significant minimum wage increase to almost 15 euros, and rising non-wage labour costs are making things even more difficult. There is a risk of significant job losses. The decision of the Minimum Wage Commission will have serious consequences for Germany as a business location.'

Von Preen called on policymakers to refrain from politicising the minimum wage. 'Politicising the minimum wage is populist and ultimately a threat to the system. Politics must stay out of wage-setting,' he demanded. 'The members of the Minimum Wage Commission are subject to strong political pressure. It is no longer possible to predict how the minimum wage will develop over the next decade.'

More information:
Handelsverband Deutschland
www.einzelhandel.de

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