Berlin: The German government backed an increase in the minimum wage to 14.60 euros per hour, the largest hike since the country adopted a minimum wage a decade ago.
The increase will come in two stages, rising from the current 12.82 euros ($14.90) to 13.90 euros at the start of next year, and then jumping again to 14.60 euros per hour on January 1, 2027.
"Millions of employees will receive noticeably more for their work -- and companies can responsibly spread the rising costs over two years," Labour Minister Baerbel Bas said on Tuesday after the German cabinet approved the increases.
The hike is "an important step towards greater fairness and recognition for those who keep our country running day in and day out", said Bas, a leader of the centre-left Social Democrats (SPD), the junior coalition partners to Chancellor Friedrich Merz's conservative CDU/CSU bloc.
About six million workers in Germany will benefit from the increase, according to the Labour Ministry.
An independent commission that oversees Germany's minimum wage had recommended the two-stage increase back in June.
The commission, which was created when Germany first introduced a statutory minimum wage in 2015, is made up of economists, trade union leaders and representatives from business and employer groups.
The hikes, however, fall short of the 15 euro per hour minimum wage discussed in the coalition agreement struck between Merz's CDU/CSU and the SPD.
Some SPD politicians have called for bypassing the commission and mandating the higher wage directly, a proposal that has drawn criticism from conservatives.
The coalition agreement called a 15 euro minimum wage by 2026 "achievable", but stopped short of directly committing to that level.
