Most workers in Europe’s biggest economy will be guaranteed at least 8.50 euros ($11.60) per hour under the legislation, which takes effect Jan. 1. Some employers will have two years to phase in the minimum wage; under-18s will be exempted, as will the long-term unemployed for six months after they return to work.
Merkel’s government took the step at the insistence of her coalition partners since last December, the center-left Social Democrats. They joined the government after Merkel’s conservatives won elections last year but fell short of a parliamentary majority.
Labor Minister Andrea Nahles, a Social Democrat, said 3.7 million people would benefit directly from the minimum wage, which she said “brings a bit more fairness to business and society and makes Germany stronger.”
Lawmakers voted 535-5 with 61 abstentions in favor of the minimum wage Thursday.
Polls show the minimum wage is popular but Merkel’s conservatives have gone along with it only unenthusiastically, having long worried that it would cost jobs.
For decades, German wage deals have been thrashed out sector-by-sector between unions and employers. So far, it has been one of few major Western industrial nations with no government-mandated national minimum wage.
Merkel said the decision was one of the “painful compromises” she had to make to secure a stable government.
“Now it has been approved and we will have to see that it is implemented sensibly,” she said at a conference organized by a group linked to her party that is critical of the government’s policies. She acknowledged that there “are certainly risks” in Germany’s ex-communist east, which still lags economically.