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Labor Minister Heil: Better pay in the low-wage sector

Photo: dts news agency / IMAGO

Federal Labor Minister Hubertus Heil wants to launch the long-announced pension package and a collective bargaining law this spring. The federal government will "present a pension package II in February with which we will permanently secure the pension level in Germany," the SPD politician announced on Thursday in the Bundestag's budget debate. The government will present a law in the spring to strengthen collective agreements: "We want federal public contracts to only go to companies that pay according to collective agreements."

Both projects agreed in the coalition agreement have been discussed in the traffic light coalition for months. A first draft by Heil for a federal tariff compliance law from May last year stipulated that federal orders worth more than 10,000 euros would only go to companies that pay according to the tariff. At the time, Heil had announced a draft law for June. Heil expects that employees will be paid better. “Where full-time employees have a collective agreement, they earn on average 18 percent more than colleagues in the same industry without a collective agreement,” said Heil.

The second pension package is intended to fix the pension level and introduce the so-called stock pension. The pension level should not fall to less than 48 percent of average wages in the long term. At the instigation of the FDP in particular, a capital stock is to be created with the help of new debt, with which a return is to be generated on the capital markets, which is intended to relieve the burden on pension insurance contributions from the mid-1930s. The draft federal budget for 2024 provides for twelve billion euros in new debt.

In his speech at the budget discussions in the Bundestag, Heil defended the state's billions in social spending and especially citizens' money against criticism. Since the introduction of the minimum wage in 2015, around two million people have been able to move up from the low-wage sector, said Heil. Since then, the minimum wage has increased by 46 percent, and basic security has only increased by 41 percent. “The introduction of citizen’s money has not changed the wage gap,” said Heil.

mik/Reuters