Companies that offer lower-paying jobs are particularly concerned, with nearly one-third predicting employment declines among those currently paying the minimum wage.

Federal Labor Minister Hubertus Heil has proposed a minimum wage of around €15, which must be reported to the EU Commission by mid-November.

The Green Party and the Ver.di union support a minimum wage of €15, arguing that it should be set at 60% of the average income according to EU guidelines.

The IAB study has intensified the ongoing political and economic debate over the minimum wage in Germany, with the SPD and Greens pushing for a wage higher than €14.

As the debate evolves, political parties like the SPD and the Greens advocate for a minimum wage exceeding €14, while the FDP and business associations resist a rapid increase.

The IAB study also reveals that 58% of companies in both West and East Germany employ workers earning less than €14.41, with a notably higher incidence of minimum wage payment in the East.

A recent study by the Institute for Employment Research (IAB) indicates that nearly 20% of businesses in Germany anticipate job cuts if the minimum wage is raised from €12.41 to €14.

The study highlights that over half of all businesses would be directly impacted by a €14 minimum wage, a significant increase compared to the previous rise to €12 in October 2022.

The Free Democratic Party (FDP) and prominent business associations oppose a sudden increase in the minimum wage, advocating instead for a decision by the divided commission.

This commission, composed of representatives from unions and employers, is expected to recommend the extent of the minimum wage increase by mid-2025, with implementation planned for 2026.

In East Germany, 25% of businesses reported paying the minimum wage of €12.41 in their lowest pay group, compared to 18% in West Germany.