The Federal Association of the Security Industry (BDSW) considers the increase in the statutory minimum wage recommended by the Minimum Wage Commission to be a serious mistake with far-reaching negative consequences for the economy, collective bargaining autonomy and public procurement. The decision to raise the minimum wage in two steps to 14.60 euros by 2027 – with an 8.42% increase to 13.90 euros as of 1 January 2025 – is neither economically viable nor objectively justified.

‘Even though the SPD’s demand for a minimum wage of 15 euros has not been fully implemented, the compromise that has now been agreed is purely politically motivated and ignores the economic reality in our country,’ explains BDSW President Werner Landstorfer. ‘Germany is in the midst of an economic downturn, many industries are struggling with structural problems – and yet this decision and the subsequent developments in collective bargaining are adding fuel to the fire.’

The association strongly criticises the ongoing erosion of collective bargaining autonomy. The minimum wage increase is not based on any comprehensible orientation towards subsequent wage developments, which is actually intended to form the basis for decisions by the Minimum Wage Commission. ‘This form of political influence undermines confidence in the existing system of social partnership. If politically determined lower limits effectively override the results of collective bargaining, this devalues the work of both social partners.’

The development with regard to public procurement is also particularly problematic. ‘Private security services are in direct competition for public contracts. If the statutory minimum wage continues to rise in this form while the public sector does not make any adjustments to its tenders, companies bound by collective agreements will be systematically disadvantaged,’ said Landstorfer. This opens the door to low-cost providers – at the expense of quality, safety and fair working conditions.

The economic impact is also enormous: ‘The gap between the wages of skilled and unskilled workers is widening. This removes key incentives for training and further education – especially in an industry where quality is safety-relevant.’

At the same time, the BDSW warns of the macroeconomic consequences: ‘A noticeable increase in prices in the retail sector and for food is inevitable. This, in turn, will fuel the next round of wage negotiations. What we are seeing here is a politically triggered wage-price spiral that will exacerbate inflation and jeopardise the competitiveness of the German economy,’ warns Landstorfer.

The association is therefore calling for a return to a fact-based procedure for setting the minimum wage – with a clear separation from party political influence and genuine consideration of the economic situation.

Comment I (ml)

The Federal Association of the Security Industry (BDSW) hits a sore spot in current labour market policy with its criticism of the planned minimum wage increase: Instead of taking a serious look at the real economic conditions, the statutory minimum wage is once again being misused as a political signal. This ignores the fact that companies – especially in the service sector such as the security industry – cannot simply pay more without serious consequences for their personnel structure, competitiveness and quality.

The minimum wage increase of 8.42% within a year is an economic policy disaster in times of weak economic activity and high uncertainty. While many industries are already struggling with falling demand, rising operating costs and bureaucratic overload, they are being burdened with additional costs through statutory minimum wages – regardless of whether this is compatible with actual productivity or not.

Particularly worrying is the disregard for collective bargaining autonomy: when politically motivated decisions undermine the free negotiation process between employers and trade unions, the foundations of social partnership are eroded. Collective agreements then become worthless – a fatal signal to all those who have previously been committed to fair negotiation processes.

The situation in public procurement illustrates the dilemma: those who pay collectively agreed wages are increasingly losing contracts to low-cost providers – with the paradoxical consequence that quality and working conditions suffer where security and reliability should actually be the top priority. This is a regulatory own goal that was bound to happen.

And what about the desired social justice? If qualifications and further training are no longer rewarded with higher wages, incentives for developing skilled workers will dwindle. At the same time, prices for goods and services are likely to rise, ultimately burdening the very consumers whom the measure was intended to protect.

See also comment 2 (dcm) Minimum wage with a sledgehammer – How political symbolism is destroying collective bargaining autonomy and the economy https://euro-security.de/gesellschaft-und-politik/mindestlohn-mit-dem-vorschlaghammer-wie-politische-symbolpolitik-tarifautonomie-und-wirtschaft-zerschlagt/