Germany Approves Historic Minimum Wage Increase

In a landmark decision, the German government has approved the largest minimum wage increase in the nation’s history. The rise will be implemented in two stages across 2026 and 2027, significantly boosting the earnings of millions of workers.

Two-Stage Increase to Support Workers and Businesses

Under the new plan, the national minimum wage will increase from €12.82 per hour to €13.90 on January 1, 2026. A second raise will follow a year later, bringing the hourly rate to €14.60 on January 1, 2027.

This two-step adjustment—recommended by the Minimum Wage Commission (Mindestlohnkommission) in June—marks the most substantial wage hike since Germany introduced its statutory minimum wage in 2015.

Labour Minister Bärbel Bas (SPD) welcomed the decision, saying, “Millions of employees will receive noticeably more for their work, while companies have the flexibility to absorb the increased costs gradually over two years.”

An estimated six million workers across Germany are currently employed in minimum-wage positions.

Falling Short of Coalition Targets

Despite the historic rise, the approved increase still falls short of the €15 per hour target outlined in the CDU/CSU-SPD coalition agreement. Nevertheless, the move is seen as a critical step toward improving living standards amid rising living costs.

How Germany Determines Its Minimum Wage

Germany’s statutory minimum wage, first introduced in 2015, is reviewed regularly by the Minimum Wage Commission. The commission is composed of six voting members:

Two employer representatives

Two employee representatives

Two independent academic advisors

Members are nominated by employer and employee organizations and appointed by the federal government for five-year terms. The body’s main task is to propose adjustments based on the evolution of collective bargaining agreements and overall economic conditions.

The commission aims to ensure that the minimum wage:

Provides adequate protection for workers

Promotes fair competition

Avoids negative impacts on employment

Once the commission recommends a new rate, the federal government formally adopts it without modification—ensuring that the process remains balanced and independent.

A Turning Point for German Workers

The approved increase signals a stronger commitment to social justice and economic equity within Germany’s labor market. As wages rise, policymakers hope the move will not only improve quality of life for low-income workers but also stimulate domestic consumption and strengthen the country’s economic resilience.