News / Economy

German Employers' Leader: Minimum Wage Would Harm Competitiveness

Ingo Kramer, the new elected chairman of the Confederation of German Employers' Association (BDA), makes a point during his speech at a gala dinner as part of an employers meeting in Berlin. Nov. 18, 2013.
Ingo Kramer, the new elected chairman of the Confederation of German Employers' Association (BDA), makes a point during his speech at a gala dinner as part of an employers meeting in Berlin. Nov. 18, 2013.
Reuters
The leader of Germany's employers' federation said on Tuesday the next government's welfare plans and the introduction of a minimum wage would endanger competitiveness.

A day after being elected head of the BDA, Ingo Kramer said Chancellor Angela Merkel's conservatives and the center-left Social Democrats [SPD] - in talks to form a coalition government - were not focussing on the right issues.

“When I look at the current topics of the coalition negotiations, I don't always get the impression that the emphasis is right,” said Kramer.

“Further benefits for pensions, care, family and healthcare  are being discussed. Minimum wages and new labor market regulations, higher public spending and higher contribution burdens are being discussed,” he said.

“But does that give us the right to put at risk the competitiveness that was won back after hard years by putting companies into a new corset of constricting rules?” he asked.

Merkel's conservatives emerged from September's election as the largest force, but fell short of a majority. Talks with the SPD are advancing and a coalition government is expected to be sworn in by Christmas.

The German economy has continued expanding during the eurozone crisis that has hit many of its trading partners hard.

The economy stagnated in the first quarter of 2013, and though it achieved growth of 0.7 percent in the second quarter, preliminary data shows it expanded by just 0.3 percent between July and September as exports weighed.

Minimum wage

Among plans being discussed in the coalition talks are a nationwide minimum wage, a hike in pensions for mothers with children born before 1992 and steps that would make it more attractive for people to stop working before they reach the statutory retirement age of 67.

Germany has faced criticism from abroad over its perennial trade surpluses and many have said stronger domestic demand, fueled by higher wages, is needed to counter imbalances that have put strains on the euro zone.

But Kramer said he was appalled by plans to introduce a minimum wage of 8.50 euros per hour, saying it would jeopardized the goal of full employment.

Merkel has signaled a readiness to accept the minimum wage. The SPD has said a failure to get this would be a deal-breaker.

“Nobody should be under any illusion: a long-term jobless person, who hasn't worked for many years and has no training, will get no entry into work in many branches and regions for a state-prescribed hourly wage of 8.50 euros,” said Kramer.

Labor and welfare reforms introduced by former SPD Chancellor Gerhard Schroeder in 2003 have been credited with boosting German competitiveness and shielding the economy from the worst of the global financial and the eurozone crises.

Merkel on Monday prepared the BDA for more labor market regulation, saying flexibility had led “in turn to abuse.”

Kramer said courts were able to pursue such abuses under current laws. He said companies were investing less than before the financial crisis and did not need new legal burdens.

You May Like

Israelis Quietly Expand Enclave in Palestinian District of Jerusalem

Estimated 500 settlers, armed or protected by paramilitary police, live in Silwan among 50,000 Palestinians More

Video US, Iran Face Similar Challenges in Syrian Fight Against IS

Both Washington, Tehran back fighters battling Islamic State militants in Iraq -- but in Syria they support opposing sides in country’s civil war More

China Boosts Efforts to Help Afghan, Regional Stability

Observers say China’s increased regional involvement are due to concerns that Afghan instability and the presence of anti-China militants in Pakistani border areas could fuel Xinjiang troubles More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
China Political Meeting Seeks to Improve Rule of Lawi
X
William Ide
October 20, 2014 10:23 AM
China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.
Video

Video Latinas Converting to Islam for Identity, Structure

Latinos are one of the fastest growing groups in the Muslim religion. According to the Pew Research Center, about 6 percent of American Muslims are Latino. And a little more than half of new converts are female. VOA’s Carolyn Presutti travelled to Miami, Florida -- where two out of every three residents is Hispanic -- to learn more.
Video

Video Nigeria Agrees to Cease-Fire With Boko Haram

Islamist militant group Boko Haram and the Nigerian government have agreed to a cease-fire. The Nigerian government issued an order Friday, telling all military chiefs "to comply with the cease-fire agreement in all theaters of operations. Why now and the significance of the agreement are questions on some people’s minds. VOA's Mariama Diallo reports.
Video

Video Kobani Fighting Sends 400,000 Refugees to Turkey

The offensive by Islamic State militants against the northern Syrian city of Kobani has caused hundreds of thousands of residents to flee to Turkey. They receive help from Turkish authorities and individuals, but say much more is needed. VOA’s Scott Bobb reports from the town of Suruc a few kilometers from the border.
Video

Video Exclusive: American Joins Kurds' Anti-IS Fight

The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video South Korea Confronts Violence Within Military Ranks

Every able-bodied South Korean male between 18 and 35 must serve for 21 to 36 months in the country’s armed forces, depending upon the specific branch. For many, service is a rite of passage to manhood. But there are growing concerns that bullying and violence come along with the tradition. Reporter Jason Strother has more from Seoul.
Video

Video Comanche People Maintain Pride in Their Heritage

The Comanche (Indian nation) once were called the “Lords of the Plains,” with an empire that included half the land area of current day Texas, large parts of Oklahoma, New Mexico, Kansas and Colorado.The fierceness and battle prowess of these warriors on horseback delayed the settlement of most of West Texas for four decades. VOA’s Greg Flakus reports from Lawton, Oklahoma, that while their warrior days are over, the 15,000 members of the Comanche Nation remain a proud people.
Video

Video Turkey Campus Attacks Raise Islamic Radicalization Fears

Concerns are growing in Turkey of Islamic radicalization at some universities, after clashes between supporters of the jihadist group Islamic State (IS) or ISIS, and those opposed to the extremists. Pro-jihadist literature is on sale openly on the streets of Istanbul. Critics accuse the government of turning a blind eye to radicalism at home, while Kurds accuse the president of supporting IS - a charge strongly denied. Henry Ridgwell reports from London.
Video

Video Syrian Defector Leaks Shocking Photos of Torture Victims

Shocking photographs purporting to show Syrian torture victims are on display at the U.S. Holocaust Memorial Museum in Washington. The museum says the graphic images are among thousands of photographs recently smuggled out of Syria by a military policeman-turned-defector. As VOA reporter Julie Taboh reports, the museum says the photos provide further evidence of atrocities committed by the government of Syrian President Bashar al-Assad against its own people.
Video

Video Drought-Stricken California Considers Upgrading Water System

A three-year drought in California is causing a water shortage that is being felt on farms and cities throughout the state. As VOA's Mike O’Sullivan reports, water experts, consumers and farmers say California needs to make changes to cope with an uncertain future.
Video

Video TechShop Puts High-tech Dreams Within Reach

Square, a business app and card reader, makes it possible to do credit card transactions through cell phones. But what made Square possible? VOA’s Adrianna Zhang and Enming Liu have the answer.

All About America

AppleAndroid

World Currencies

EUR
USD
0.7798
JPY
USD
106.41
GBP
USD
0.6203
CAD
USD
1.1242
INR
USD
61.430

Rates may not be current.