For members


Jobs in Germany roundup: What an SPD-led coalition could mean for workers

We are still a long way off of knowing what Germany's new government will be. But with talks underway, we looked at what the possible Traffic Light coalition could mean for the future of working life.

Jobs in Germany roundup: What an SPD-led coalition could mean for workers
Archive photo shows a working from home set up in Germany. Photo: picture alliance/dpa/dpa-tmn | Christin Klose

The centre-left Social Democrats (SPD) secured a victory by a whisker in Germany’s election on Sunday, closely followed by the centre-right Christian Democrats (CDU) with their Bavarian sister party, the CSU. 

As we’ve been reporting, both parties want to form a coalition with the Greens, who came third in the election, and the Free Democrats (FDP) who landed in fourth place. As the SPD came first in the election they are seen as having an advantage on trying to form a coalition. According to polls, the German public is also most in support of an SPD-led ‘Traffic Light’ coalition government.

Here’s a look at what this constellation could mean for people working in Germany. For more on what the coalitions mean and what could happen next, check out our story here:

Jamaica or traffic light: What’s next for Germany and what does it mean?

Traffic Light (Ampel) – SPD-led coalition with Greens and FDP 

MINIMUM WAGE: With the Social Democrats at the helm, the Traffic Light would have a focus on raising the minimum wage. 

The SPD wants to hike up the German minimum wage by about two euros, taking the so-called Mindestlohn up to €12 an hour. This is an ambition it shares with the Greens which wants to see the minimum wage go up “immediately”.

The business-friendly FDP doesn’t mention increasing the minimum wage in its manifesto – and the party has been against minimum wage thresholds in the past. But with an SPD-Green coalition it seems likely that this could be pushed through. 

STARTUPS: Here’s where things could work out quite well in this constellation. The SPD describe start-ups as “important growth engines for the economy” and say they want to turn Germany into the “startup capital of Europe” by introducing easier access to capital and state-funding, offering organisational support through agencies, and fostering a “culture of second chances” which would include changes to bankruptcy law.

For freelancers and solo-entrepreneurs, a new type of insurance would ensure that they were covered during difficult times through the job centre – a bit like jobseekers’ allowance for the unemployed. They would also be integrated in the pension system step by step, while the social insurance for artists would be expanded to cover a wider range of self-employed individuals. 

The SPD’s chancellor candidate Olaf Scholz in a group picture after the meeting of the SPD parliamentary group in the Bundestag on Wednesday. Photo: picture alliance/dpa | Michael Kappeler

The FDP is also pro-innovation – they say they want to “awaken the entrepreneurial spirit” in Germany.

They also want to see more support for the self-employed. “We want to eliminate unequal treatment and, for example, finally reduce contributions for the self-employed to statutory health insurance,” the party’s manifesto says. 

Lots of foreigners in Germany are self-employed or work in startups, especially in cities, so it will be interesting to see how this discussion develops in coalition talks. 

TAXES: This could be a sticking point. The SPD wants lower taxes for lower and middle class earners – but not for the rich. In their 2021 manifesto, the SPD promises to “lower taxes for the majority”.

“We will carry out an income tax reform that improves small and medium incomes, strengthens purchasing power and, in return, makes the top five percent pay more for the financing of important public tasks,” they say.

While the liberals are keen for lower taxes across the board, the bulk of their tax relief initiatives would be for high-earners and businesses – so this is bound to create problems in this kind of constellation. 

The Greens have a fairly similar tax policy to that of the SPD, although they would offer more tax relief to the least well off.

READ ALSO: EXPLAINED: What the German parties’ tax pledges mean for you

INNOVATION AND DIGITAL UPGRADES: This is an important point in all the parties’ programmes, not least because Germany is seen as falling behind other countries on these points. 

For the Greens, though, innovation has to have a climate focus – the bottom line of their party. 

“We are launching a decade of investment in the future, the Greens manifesto says. “In fast Internet, in cutting-edge research, in charging stations, in hydrogen technologies and in modern urban development.

“We want to make energy-intensive industries technology pioneers in the development of climate-neutral processes.

“Green financial markets play an important role in the fight against the climate crisis.”

The Free Democrats are calling for a ‘Ministry for Digital Transformation’.

“To create a leaner and more efficient government, we want to bundle competencies in one ministry and link it closely with the other government departments,” says the FDP programme. “This is the only way we can shape the digital transformation of the state, society and the economy quickly, efficiently and consistently for the benefit of everyone in our country.”

UNEMPLOYMENT SUPPORT: The SPD wants to reform the controversial Hartz IV unemployment benefit or Arbeitslosengeld II – the programme it came up with back in 2002. The SPD say they want to switch to a benefits system based on encouragement rather than sanctions.

The SPD want to call it: Bürgergeld. (Which translates to ‘citizens’ fund’).

The Greens want to get rid of Hartz IV and replace it with a guaranteed security system that “protects against poverty and guarantees the socio-cultural minimum subsistence level without sanctions,” says their manifesto. 

The FDP stands to the right on this issue and is is in favour of restricting unemployment benefits. They want to encourage more people into the workforce. 

FOREIGN QUALIFICATIONS: In its section on ‘Zusammen Leben’ (living together), the SPD dedicates a paragraph or so to the discussion of jobs. As we saw in the aftermath of Brexit, third-country migrants in Germany face major hurdles in getting their professional qualifications recognised in Germany, meaning some lawyers, accountants, master bakers, etc., are unable to prove their competence in their field without jumping through numerous hoops.

The SPD says it wants to ensure that foreign qualifications are recognised in Germany. It also wants to end discriminatory selection policies for work in the public sector. At present, a number of public-sector roles (at state universities, for example) are EU-only jobs, meaning highly qualified non-EU people are shut out from applying for them. According to the SPD’s manifesto, this would end if they were in power. 


Other interesting points:

In its manifesto, the FDP calls for more flexibility when it comes to working hours, in particular. They call for weekly instead of a daily maximum working hours, which would make it possible for people to work four instead of five days for example. 

“While our competitors stand for ‘more of the same’ or a swing to the left, we stand for freedom, modernisation and sustainability through innovation,” say the FDP.

The Greens want to cut red tape in the workforce. “By reducing bureaucracy, providing support for succession and and targeted support for training in the skilled trades, we want to ensure the future viability of a strong skilled trades sector,” the party says in its manifesto. 

READ ALSO: What a CDU-led coalition could mean for foreigners in Germany

Is this coalition going to happen?

We have absolutely no idea at this stage. Talks are at the very beginning and we’re set for weeks or months of negotiations but we’ll keep you posted on the latest developments. 

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For members


How to find out what your colleagues earn in Germany

If you suspect your colleagues may be raking in a bit more dough than you are, you'll be pleased to know there's a way to find out for sure. Here's what to know about Germany's wage transparency law - and how to make use of it.

How to find out what your colleagues earn in Germany

Like many countries worldwide, gender pay inequity is a persistent issue in Germany. Recent analyses show that women in Germany earn 18 percent less on average than their male counterparts – the third highest pay gap in the EU. 

In 2017, Germany adopted the Wage Transparency Law (Entgelttransparenzgesetz) to try and address this problem.

The act is designed to highlight pay discrepancies between male and female employees who do equal work. In fact, it’s designed as way to get around the non-disclosure clauses in some employment contracts and the general taboo in German society when it comes to discussing salaries, both of which makes it difficult for women to know if they are being underpaid. 

Unfortunately, making use of the law in practice can prove quite complicated – but it can be done. So if you suspect your male colleagues might be taking home a bigger salary for no good reason, here’s how to find out. 

How does it all work? 

The law, which came into effect in July 2017, has two main stipulations aimed to make pay disparities more transparent and encourage companies to address them. 

First, it enables individuals working at companies with more than 200 people to know the median pay of a group of at least six employees of the opposite sex who work at the same level as you. 

Second, the law encourages companies with more than 500 employees to regularly review their pay structures and publish details on whether they are complying with equal pay rules as part of their financial reports.

READ ALSO: ‘How much do you earn?’ New law tackles gender pay gap

OK, but how do you get hold of this information? 

If you work at a company that employs 200 people, and has at least six people of the opposite sex doing comparable work to you, you can submit a written request for pay information. In this request, you have to demonstrate that the employees whose pay information you are requesting are doing equivalent work to you. This generally means they have the same overall requirements and burdens as you. A good benchmark would be if that person can stand in for you if you miss work because of illness or vacation. 

You can formulate the request on your own, or use a form provided by the government. You should submit the request through your workers’ council (Betriebsrat) unless your company doesn’t have one, in which case, you can go directly through your employer. 

Woman working on laptop at home

A woman works on a laptop at home. The first step in finding out colleagues’ pay is to file a request. Photo: picture alliance/dpa | Annette Riedl

In addition to requesting information on the median of the average full-time annual salary for your position (with the median being the halfway between the lowest and highest salaries), you can request information on up to two other salary components, such as performance-related pay and hardship allowances. Your employer is also required to tell you how they determined your own remuneration.  

Within three months the works council is expected to collect the requested information from the employer and return it to you in written form. You are only allowed to make a request once every two years, but if you team up with other colleagues, you can get access to much more info in a shorter period of time. 

READ ALSO: Women in Germany earn nearly a fifth less than men

What do I do with this information?

Depending on what you find out, there are multiple next steps. If you discover that you earn less than the median salary of your peers, this doesn’t automatically give you the right to a salary adjustment. Instead, a good first step is to take your concerns to your works council or trade union, who should then relay them to the company and pressure your employers to review their pay structure.

If you really want to ramp things up, suing for equal pay under the General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetzes) is also an option – though this route can be precarious. If you’re in a union, you might want to consult with them for legal advice about whether your case is likely to succeed. 

This is because you would have to prove that you are being paid less because of your gender. And while the legal process can be long (a recent successful lawsuit took more than four years), you have to decide quickly if you want to pursue it: after finding out about the salary discrepancies, you have just two months to file a claim. 

READ ALSO: REVEALED: Germany’s top-paying jobs and highest-earning states

What if my company doesn’t qualify? 

A main critique of the Wage Transparency Law is that a majority of women in the country don’t qualify for it, given that around two-thirds of women work in small businesses that employ less than 200 people.

For this reason, critics have called for a reform to the law so that it applies to all companies. Some politicians have embraced this position, with Green Party leader Ricarda Lang hopeful that a change could come as early as this year.

Colleagues work together at a startup.

Colleagues work together at a startup. Small businesses are currently not covered by the law. Photo: picture alliance/dpa/dpa-tmn | Zacharie Scheurer

Until that point, strategies for increasing pay transparency at smaller companies include talking openly with fellow employees about salaries and collaborating with your works council to pressure your company to reveal – and potentially review – its pay structures.

Another option is to search for information on average salaries in your field at companies similar to yours, or use websites like Glassdoor to check for salary information from your company.

READ ALSO: INTERVIEW: How to get an English-speaking job in Germany

Is this law actually effective? 

All in all, making use of the transparency law can be pretty daunting. Even if an employee uses the law to reveal pay discrepancies, there is no guarantee that the company will address the gap. Indeed, critics have argued that the law unfairly places the burden on employees to act on pay discrepancies, through lawsuits or other pressure tactics, rather than companies. 

Perhaps for these reasons, the law has had an underwhelming effect, as it appears that a vast majority of employees haven’t taken advantage of it since its implementation. According to an evaluation from 2019, only four percent of employees surveyed had submitted a request for information, while about 45 percent of companies with over 500 employees have reviewed their pay structures.

Germany is not unique in its rocky rollout of its pay transparency law, as a report by Eurofund found that other countries who adopted pay transparency laws in response to the European Commission’s recommendations have also faced challenges in implementation. But the report contends that with continued dedication to the issue of equal pay, and a willingness to adjust and reform laws seeking to address this issue, these measures could prove more effective with time.