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Battle in Germany to water down minimum wage

– Who should be exempt? –

To placate hardcore opponents, the formulation adopted in the coalition government’s programme left the door open to a number of exceptions, as well as for a transition period until 2017.

Different employers’ federations are looking to exempt apprenticeships and trainees from the minimum wage mechanism.

And there are also suggestions that job-starters with no qualifications, retired people looking to top up their pensions with mini-jobs, and seasonal workers should be exempted.

Another moot point for employers is that a minimum wage will apply across the entire country, even though 25 years after the fall of the Berlin Wall average wages in the formerly communist eastern states are still below those in the west.

The DIW economic think-tank estimates that on January 1, 2015 when the minimum wage comes into effect, around 4.5 million people in Germany will stand to benefit.

But if the exceptions currently under discussion come into effect, as many as 1.5 million of them would be left out, said DIW economist Karl Brenke.

He believed that setting too many exemptions “would be fatal”.

“It would lead to major distortions” on the labour market, particularly for low-qualified workers in the services sector, the expert argued.

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Why, for example, would an employer hire someone at 8.50 euros per hour when a pensioner could do the same work for much less?

As is often the case in Germany, the battle is also being waged on legal grounds, with supporters and opponents of the minimum wage arguing over whether any exceptions would conform to the principle of equality enshrined in the German constitution.

Unsurprisingly, a study commissioned by the Bavarian industry federation and Heidelberg University concluded this week that all the exemptions posited were acceptable.

But “dignity doesn’t recognise exemptions,” the DGB trade union federation retorted and called for a fixed national minimum wage for everyone.

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