Merkel's Cabinet OKs limited minimum wage deal

AP News
Posted: Sep 18, 2013 9:23 AM
Merkel's Cabinet OKs limited minimum wage deal

BERLIN (AP) — Chancellor Angela Merkel's Cabinet approved a minimum wage deal for stonemasons Wednesday at its last meeting before Germany's election, underlining her coalition's rejection of a single national standard as it faces a tight re-election battle.

Germany is unusual among Western countries in lacking a national minimum wage.

Center-left challenger Peer Steinbrueck of the Social Democrats advocates a mandatory national minimum wage of 8.50 euros ($11.35) per hour.

But Merkel's center-right coalition of conservatives and pro-market Free Democrats prefers to let employers and employees decide on minimum pay on a sector-by-sector, region-by-region basis. The government then endorses those deals, making them legally applicable to all workers in a sector.

Wednesday's decision brings the total to seven wage deals since the 2009 election and 12 in total, adding to agreements for cleaners, construction workers and others. The deal for stonemasons foresees minimum pay of at least 10.13 euros ($13.53).

Having politicians set minimum wages is "absolutely wrong — it can't work out well," Labor Minister Ursula von der Leyen, a member of Merkel's Christian Democrats, told ZDF television. "We say that the people who are experts — unions and employers — should do it."

Steinbrueck's campaign spokesman for labor issues, Klaus Wiesehuegel, accused the government of delaying a decision on approving the latest deal only to clear it days before the election.

"That's not how credibility looks," he said.

Merkel is heavily favored to win a third term in Sunday's parliamentary election, but the prospects of continuing her partnership with the Free Democrats are uncertain. The smaller party strongly rejects having a national minimum wage.

Polls this week have shown the coalition of Merkel's conservatives and the struggling Free Democrats level with or marginally behind the combined main opposition — Steinbrueck's Social Democrats, their Green allies and the hardline Left Party.

Merkel's conservatives look set to emerge as the biggest single party.

The Social Democrats and the Greens together are short of a majority and say they won't form a coalition with the Left Party, which opposes German military deployments abroad as well as eurozone reform and bailout policies. The Left Party also seeks more radical redistribution of wealth and demands a 10-euro ($13.36) minimum wage.

That leaves as likely a Merkel-led coalition of her conservatives with the center-left Social Democrats. That would be a return to the "grand coalition" that Merkel led from 2005 to 2009.