Minimum wage: increase also affects trade

More than one in eight new hires affected / Employees are becoming more expensive for employers.

NUREMBERG // Around 13 percent of new hires in employment subject to social security contributions are hired for less than 13.90 euros.

This means that new hires are significantly more likely to be affected by the planned minimum wage increase than all employment relationships subject to social insurance contributions, at around five percent. These are the findings of a study by the Institute for Employment Research (IAB).

At 16.7%, new hires in part-time employment subject to social security contributions are more affected by the minimum wage increase than those in full-time employment at 11.9%. From a regional perspective, the proportion in eastern Germany is above average at 14.7 percent, while it is slightly lower in western Germany at 12.6 percent. “Experience shows that companies tend to adjust employment levels by hiring fewer new employees rather than making redundancies. It is therefore particularly important to determine the extent to which new hires are affected by the minimum wage increase,” explains IAB researcher Martin Popp.

In terms of new hires subject to social security contributions, agriculture and forestry as well as the hospitality industry are particularly affected by the minimum wage increase.

A total of around ten percent of all jobs, i.e. both newly started and existing employment relationships, will be affected by the next minimum wage increase to 13.90 euros per hour on January 1, 2026. The subsequent increase to 14.60 euros per hour on January 1, 2027 would affect a slightly higher proportion of jobs, at around twelve percent.