Germans reach minimum wage compromise

19th June 2007, Comments 0 comments

19 June 2007, Berlin (dpa) - Germany's governing parties agreed Tuesday to extend minimum wage coverage, removing a major irritant within Chancellor Angela Merkel's coalition. Members of the chancellor's Christian Democrats (CDU) expressed satisfaction that the deal did not include an across-the-board introduction of a minimum wage for workers. Her left-of-center Social Democrat (SPD) partners had sought such a pledge but agreed to a compromise under which an increased number of low paying sectors will hav

19 June 2007

Berlin (dpa) - Germany's governing parties agreed Tuesday to extend minimum wage coverage, removing a major irritant within Chancellor Angela Merkel's coalition.

Members of the chancellor's Christian Democrats (CDU) expressed satisfaction that the deal did not include an across-the-board introduction of a minimum wage for workers.

Her left-of-center Social Democrat (SPD) partners had sought such a pledge but agreed to a compromise under which an increased number of low paying sectors will have a basic pay rate set.

"We did not achieve our goal, but reached an important stage," said SPD chairman Kurt Beck following the deal, which came after seven hours of talks that began on Monday evening.

Germany is one of the few countries in the 27-member European Union that does not have a minimum wage, except for construction workers and cleaning staff.

The SPD supports a minimum hourly wage of 7.50 euros (10.05 dollars) to protect German workers from being undercut by cheap foreign labor, but the CDU says this would lead to job losses.

Some 70 per cent of the population backs the idea of a minimum wage, according to recent polls, and the SPD has been pressing the issue to counter a fall in popularity against the CDU.

Germany's booming economy has recently led to big pay raises in the engineering sector, but low-paid workers in some service industries have seen their wages stagnate.

Officials said the number of sectors covered by the extension of the minimum wage deal would have to be worked out in cooperation with management and employees.

The marathon talks also agreed on financing nursing care insurance - another contentious issue that has led to strains within the 19- month-old coalition.

From July 2008, nursing care contributions split between workers and employers would increase by 0.25 percentage points of gross wages. In return, contributions to unemployment insurance will fall by 0.3 percentage points from the beginning of next year.

DPA

Subject: German news

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