Germany to impose minimum wage in key sectors

11th April 2005, Comments 0 comments

11 April 2005, BERLIN - The German government is poised to impose minimum wages in key sectors in order to prevent east Europeans from pushing down the cost of labour in Germany, officials said on Monday.

11 April 2005

BERLIN - The German government is poised to impose minimum wages in key sectors in order to prevent east Europeans from pushing down the cost of labour in Germany, officials said on Monday.

Chancellor Gerhard Schroeder, with the backing of the conservative opposition, is expected this week to expand a rule in place since 1996 requiring construction workers coming to Germany to be paid at German wage levels.

Although citizens of the eight new European Union (EU) member states in eastern Europe are barred from working in Germany for a transition period lasting several more years, a number of loopholes have already been found.

Butchers from eastern Europe, for example, declare they are self-employed and thousands have arrived in Germany over the past year to work in slaughterhouses. They are paid EUR 9.50 an hour as opposed to the EUR 25 that German nationals get for the dirty, dangerous work.

With 20,000 German butchers unemployed and a key state election looming on 22 May in North Rhine-Westphalia state, Schroeder is under pressure to take action.

The opposition conservatives, who normally might be expected to oppose such labour regulation, support the government apparently due to election calculations.

Business leaders reject the move.

"This is a dangerous dead end," said Ludwig Georg Braun, head of the German Chamber of Industry and Commerce (DIHK), in a Die Welt newspaper interview.

Braun warned that keeping wages higher in Germany would lead to hundreds of thousands of job losses as companies packed up and moved to the lower waged countries.

Germany's official unemployment is currently 12.5 percent with 5.2 million people jobless.

But the head of the Federal German Labour Agency last week admitted the real jobless level is far higher and that 6.5 million people are unemployed if those in state-funded make-work projects and those who have stopped looking for work are counted.

DPA

Subject: German news

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