Our colleagues from RTL recently spoke to the vice president of the Federation of Craftspeople about how businesses are coping with the latest tripartite measures and what they mean for clients.
Alexa Ballmann, vice president of the Federation of Craftspeople, illustrates the issue with the following example: a business employing ten people who earn the minimum wage for skilled workers will have to cover the 3.10% increase of the minimum wage from January, as well as the wage indexations from March, April, and the end of the year. For 2023, this will mean an increase in labour expenses of €27,400.
Ballmann noted: “For a small business making an annual profit of €40,000 to €45,000, it will mean giving up half of it. This means less money to invest, which is very important. It slows down growth and in some cases even means downsizing.”
And what role will the latest tripartite agreement play? The government has promised to fully compensate the wage indexation through the Employers’ Mutual Insurance Scheme up to, and including, January 2024.
Ballmann commented: “This is a very nice gesture, but it will not get businesses out of their predicament. ... Prices would need to be raised by almost 20%, so it will certainly not work out. Clients have to expect that prices are going up.”
