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 Like most German employers, he'll have to pay all his 74 staff at
the four-star Ringhotel "Zum Stein" at least 8.50 euros an hour from
Jan. 1 and he's worried about how this will impact business at the
retreat 130 km (80 miles) southwest of Berlin.
"To what extent can you persuade guests to continue buying or
consuming the same amount of products? If the beer or wine gets more
expensive, would you drink the same amount as before?" he said.
Maintaining the hotel's existing salary structure will increase his
wage costs by 8 percent.
Chancellor Angela Merkel's government agreed in April to introduce
Germany's first country-wide wage floor in a victory for the Social
Democrats (SPD), who made it a condition for joining a coalition
with Merkel's conservatives last year.
Some economists believe the reform will boost consumption - which
Berlin is relying on to drive economic growth - while others say it
could reduce purchasing power if it causes firms to cut jobs or hike
prices.
More than one in four German firms expect to be directly affected.
Of those, more than half said they would need to take
counter-measures such as cutting staff or increasing prices, a
survey by the Munich-based Ifo institute found.
The law comes at a time when Europe's largest economy has cooled and
the government faces pressure from European partners to boost weak
investment.
While 21 out of 28 European Union states have a minimum wage,
Germany has long resisted, using sector- or region-wide collective
wage deals. But these have become far less frequent since 1998.
Trade unions have broadly welcomed the change of tack, mindful of
the sharp expansion of the low-wage sector since 2003, when Gerhard
Schroeder, Merkel's SPD predecessor, liberalized labor laws. Reports
have since surfaced of workers earning as little as 2 euros an hour.
JOB CUTS?
The minimum wage is expected to weigh hardest on firms in the east,
where workers earn less than the national average and fewer are
covered by collective deals. Hotel and catering industry body DEHOGA
said staff costs could surge by around 20 percent in some regions.
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But how the reform will affect the labor market seems harder to
call, with some economists seeing little impact, while others
estimate up to 570,000 positions could be lost.
Mario Ohoven, head of a lobby group for the Mittelstand - the small
and medium-sized firms that form the backbone of the economy - said
the new law would be a "job killer".
"Job cuts, declining investment and higher costs are the price that
companies and citizens will pay for what is supposedly a great
social achievement," he said.
Ohoven said around a third of bakeries in the east faced the threat
of closure and that the new legislation put hotels and restaurants,
where the share of staff costs is particularly high at up to 40
percent, in a tough position.
Enzo Weber of Germany's Institute for Employment Research (IAB) said
there was a risk that the minimum wage would slam the brakes on
rising employment, though he saw no major impact on jobless numbers.
"The minimum wage increases costs for employers but can also have
positive effects like filling vacancies and providing job
stability," he said.
But back at the Ringhotel, Pirl is taking no chances. He plans to
cut costs by holding off on investments and, at least for now, not
replacing any staff who leave.
(Additional reporting by Holger Hansen; Editing by Madeline Chambers
and John Stonestreet)
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