Finance minister backs a national minimum wage

19th December 2007, Comments 0 comments

German Finance Minister Peer Steinbrueck came out in favour of a national minimum wage in an interview published, adding fuel to a rising debate within the country's broad coalition government.

19th December 2007


Steinbrueck's comments came after the German parliament approved plans for a minimum in the postal sector that has led competitors of the former state monopoly, Deutsche Post, to announce they would withdraw from the sector and shed thousands of jobs.

A national minimum wage "would be clearer and better for Germany," said Steinbrueck, a member of the Social Democrats (SPD), the junior partner in the coalition led by Chancellor Angela Merkel, a Christian Democrat (CDU).

He told the daily Sueddeutsche Zeitung he believed that at least some in Merkel's party would prefer a legally binding national minimum wage of around 7 euros (10.50 dollars) an hour to having separate levels set in different sectors.

Last week, the Bundestag backed a proposal to pay the country's 220,000 postal workers a minimum hourly wage of between 8.00 and 9.80 euros from the beginning of next year. Construction workers and office cleaners already have a minimum level.

The legislation takes effect as Deutsche Post surrenders its letter delivery monopoly, as the final stage in a privatization and liberalization process that began in 1995.

The main backer behind Deutsche Post competitor PIN, which had banked on taking much of its letter business, said Wednesday there was no financial basis for continuing with the company.

The Axel Springer company, which has a 64-per-cent stake in PIN apart from its large newspaper interests, said it was looking at writing off 620 million euros.

PIN last week said it would lay off 1,000 of its 9,000 workers, many of whom earn around two thirds of the minimum wage passed by the Bundestag.

Another competitor, TNT, has said it will attempt to reach a separate minimum wage deal of 6.50 euros in the eastern states and 7.50 in the west.

Steinbrueck expressed no sympathy for Deutsche Post's competitors, noting that they had declined to attend discussions with Deutsche Post and three trade unions on the minimum wage, calling this "a historic mistake."

Many members of Merkel's CDU remain steadfastly opposed to a national minimum wage. Economics Minister Michael Glos, a member of the CDU's Bavarian sister-party, the CSU, warned against "opening the floodgates."

Glos predicted that the next sector to be targeted by the SPD and the unions would be the temporary workers that many German companies are making use of during the current economic upswing.



0 Comments To This Article