THE INTERNATIONAL Monetary Fund (IMF) yesterday voiced concern over the German minimum wage coming into force next year, as it raised the robust EU economy’s growth forecast.
The body is concerned that the minimum wage earners will be concentrated in the east of the country, where unemployment is already above the national average. The authors also say that existing estimates of the job losses from the €8.50 (£6.29) minimum wage range from 60,000 to 850,000, two per cent of the country’s labour force.
The Fund also warns that with Germany’s wage top-up system, a minimum wage may raise salaries, but the drop in tax credit-like income will offset much of the rise.
Despite the Bundesbank’s suggestion yesterday that the country’s growth may have stagnated during the second quarter, the IMF raised Germany’s growth to 1.9 per cent, from 1.7 per cent previously.