From January 1, 2026, Germany will implement one of the most significant increases in the minimum wage in its recent history, with major implications for the labor market, low-wage workers’ incomes, and the country’s economic dynamics. The decision stems from a recommendation by the Minimum Wage Commission—an independent body made up of representatives of employees and employers—and the subsequent approval by the German federal government.
Currently, the statutory minimum wage in Germany is €12.82 gross per hour. As of January 1, 2026, this threshold will rise to €13.90 gross per hour, representing an 8.42% increase compared to the current level. The increase does not stop there: the Commission has in fact planned a second step for January 1, 2027, when the minimum wage will rise further to €14.60 gross per hour, bringing the overall increase from 2025 to 2027 to nearly 14%.
Objectives and benefits for millions of workers
This adjustment will directly affect around 6.6 million employment contracts, representing
a significant share of the German workforce employed in low-wage sectors. For full-time workers, the increase in the minimum wage will translate on average into about €190 more in gross monthly income—a tangible benefit for households and overall purchasing power.
The official motivations behind the increase are linked to the desire to strengthen social justice, combat job insecurity, and support the income of the most vulnerable segments of the labor market. The German Minister of Labor described the increase as “a significant step forward” in recognizing the contribution of workers who are essential to the everyday functioning of society.
Criticism and the economic debate
However, the minimum wage increase is not without criticism. According to a recent report by the Ifo Institute, more than one in five companies surveyed expects to reduce jobs in response to higher labor costs, while nearly one third of the firms interviewed plan to cut investments in the coming years.
The political and economic debate is intense: on the one hand, supporters of the increase highlight the social benefits and the reduction of inequalities; on the other, critics and business representatives warn of risks to competitiveness and employment, especially in low-productivity sectors. In any case, Germany is preparing for a new phase in its wage policy, in line with trends toward minimum wage adjustments in many European countries.