Business Lobby Fears 'Irreversible Damage' as Germany Weighs Minijob Overhaul
Published on 07/11/2026 at 20:43 | Redaktion boerse-global.de
Germany’s powerful trade and hospitality associations have issued a stark warning against any move to scrap or raise the cost of the country’s popular “Minijob” arrangement. In an open letter to Labour Minister Bärbel Bas and Health Minister Nina Warken, they argued that making the low-wage jobs more expensive would cause “irreversible damage” to the economy.
The letter, signed by representatives of the retail, hotel and restaurant, and agricultural and forestry sectors, outlined three potential scenarios they see as existential threats: abolishing the special status altogether, raising employer contributions to health and long-term care insurance, and increasing the flat-rate tax from its current 2 percent to a planned 5 percent.
That pressure comes as a government-appointed commission on old-age security has recommended winding down the special treatment of Minijobs. Its proposal would bring almost all Minijobbers into the statutory pension insurance system, with exceptions only for school pupils, in a bid to shore up pension finances and close coverage gaps.
Chancellor Friedrich Merz moved to calm the debate, insisting on Saturday that a complete abolition was not on the table. But his own coalition is split on the way forward. CSU leader Markus Söder rejected any abolition outright, arguing that stripping the special status would hit restaurants, shops and farms hardest. Instead, he called for scrapping the “pension at 63” early-retirement scheme and introducing a funded pillar to the pension system.
Veronika Engelmeier, chairwoman of the Social Association Germany (SoVD), pushed in the opposite direction. She demands full mandatory pension insurance for Minijobs, saying that would particularly help women avoid old-age poverty.
The political tug-of-war plays out against a backdrop of measures already in force. Since July 1, Minijobbers who previously opted out of pension insurance have had a one-time window to re-enter the system. The monthly earnings cap currently stands at €603.
Further regulatory changes are in the pipeline. The government plans to raise the basic tax-free allowance to €12,900 by 2028 and the employee lump-sum deduction to €1,430. Child benefit should climb to €272. At the same time, the highest income-tax bracket — the so-called “rich tax” — would rise to 45 percent on incomes above €250,000 and 47 percent above €280,000. Labour-law revisions would allow fixed-term contracts of up to 48 months, and the government is considering scrapping telephone sick notes, replacing them with a proof-of-illness requirement starting on the first day of absence.
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