The Influence of the Minimum Wage on Collective Bargaining

It also looks at the impact of the government’s intervention in the adjustment mechanism in 2022. The sectors studied include agriculture, meat processing, bakery, retail, floristry, hospitality, chain restaurants, private security services, building cleaning and hairdressing, in each case focusing on the collective bargaining areas of North Rhine-Westphalia and Berlin-Brandenburg. The combination of quantitative and qualitative methods shows that collective bargaining was most strongly influenced by the government’s decision to increase the hourly minimum wage to 12 euros with effect from October 2022, a move which threatened to inval¬idate many of the wage brackets in existing collective contracts. In most of the industries studied, however, it proved possible to adjust the agreed wage structures. Expiring collective agreements were mostly renewed as normal, while in some cases the collective bargaining rounds were brought forward. The fact that the latest increase in the minimum wage, announced in June 2023, was once again fixed by the Minimum Wage Commission has restored some predictability to the decision process. This makes it easier for the col¬lective bargaining parties to keep pace with the minimum wage adjustments and gradually restore the differentials of the partially compressed collective wage structures.