Raising the Minimum Wage: A Path to Dignity in Berlin

Decline in Collective Bargaining Wages Among Retail Workers

Recent reports reveal that less than a quarter of retail employees in Germany receive wages determined by collective bargaining agreements. According to the Federal Ministry of Labor, only 22.9 percent of retail workers were covered by such agreements in 2023, a significant drop from 38.2 percent in 2014. Employees in non-unionized companies earn approximately 500 euros less per month compared to their unionized counterparts. There is a notable disparity in wages between East and West Germany. For instance, tariff-bound employees in Brandenburg earn, on average, twelve euros less per hour than those in Hamburg. The highest average gross monthly salary is 4727 euros for men in unionized companies in West Germany, while the lowest is 2682 euros for non-unionized women in East Germany. On average, employees under collective agreements earn 4379 euros per month, compared to 3867 euros for those without such agreements. Politician Susanne Ferschl from the Left party criticized the precarious working conditions and low wages in the retail sector. She highlighted the government's inaction and called for measures to improve collective bargaining coverage, including easier declarations of general applicability and an immediate increase of the minimum wage to 60 percent of average earnings. To address the declining rate of collective bargaining, Federal Labor Minister Hubertus Heil has proposed a new law requiring companies that undertake public contracts to pay their employees according to collective agreements.