Germany's upcoming statutory minimum wage increase to €13.90 per hour, effective 1 January 2026, is set to affect up to 6.6 million jobs across the country, according to estimates from the Federal Statistical Office (Destatis). This significant change, representing around 17% of all employment relationships, will see affected workers' earnings rise by an estimated €400 million, with notable implications for sectors including furniture manufacturing, interior design, and retail.
© Wrangler | Dreamstime
Destatis based its projections on data from the April 2024 earnings survey and emphasised that this increase aims to lift hourly pay for employees currently earning below €13.90, with a baseline assumption that all earn at least the previous minimum of €12.82. However, the estimate may overstate the total impact since it does not account for wage rises after April 2024.
Women and workers in East Germany stand to benefit disproportionately from the increase. Approximately 20% of women's jobs will see wage increases, compared to 14% for men. Regionally, eastern Germany shows a higher affected share at 20%, versus 16% in the west. Mecklenburg-Western Pomerania tops the list with 22% of jobs affected, while Hamburg reports the lowest proportion at 14%.
Sectoral disparities are pronounced, with the hospitality sector particularly impacted at 56%, alongside agriculture, forestry, and fishing at 43%. While not explicitly detailed for interiors and furniture, the ripple effects across retail and manufacturing, both critical to the furniture and home décor industry, are expected as wage costs rise.
Looking ahead, a further increase to €14.60 per hour is planned for 1 January 2027. This is projected to affect up to 8.3 million jobs (about 21% of employment), driving an additional estimated €430 million rise in earnings over the previous increase. Again, this assumes all workers below €14.60 will be paid at least €13.90 following the 2026 hike, without accounting for intervening wage adjustments.
Destatis clarified that trainees, interns, and minors are excluded from these calculations due to minimum wage exemptions.
As Germany's labour market prepares for these wage adjustments, businesses in interior-related sectors will need to factor in rising labour costs, potentially influencing pricing, investment, and hiring strategies. This wage policy marks a crucial development for European B2B manufacturers and retailers navigating cost pressures alongside evolving consumer demand.
More information:
Destatis
www.destatis.de
