While American workers in such low-paying jobs as the fast food industry and Walmart struggle for an increase in their wages, and the U.S. Congress continues to block any increase in the national minimum that current stands at a paltry $7.25 per hour, while workers are forced to stay on the job until age 67, one of the United States’ most powerful economic competitors, Germany, has now set a minimum wage of $11.55 per hour (€8.50) and lowered its retirement age to 63.
German Chancellor Angela Merkel, a staunch economic conservative, signed the bill as part of a deal with the country’s liberal Social Democratic party. Merkel (pictured) needs support from the opposition Social Democrats to keep her coalition government together.
Germany had no minimum wage prior to the signing of the new law.
Until now, wages were set primarily by union negotiations. The new minimum takes effect in 2015 and will help an estimated 17 percent of all German workers.
Earlier this year, the Republican-led U.S. House of Representatives voted down a measure that would have raised the U.S. minimum wage to $10.10 per hour. According to a recent study, one of every four workers in the U.S. private sector gets paid a wage under $10 per hour.
That number may rise, as industries that employ mainly low-paid workers occupy an increasingly large share of the economic sector. Those industries include fast food and retail trade.
In the United States, workers may begin receiving Social Security benefits as early as age 62, but that age is considered “early retirement” and means that recipients would not receive the full amount due if they had waited several more years.
To receive maximum benefits, U.S. workers born starting in 1960 must work until age 67. Workers born before then but after 1937 hit “full retirement” between the age of 65 and 67, with those born in 1937 or earlier having begun to receive full Social Security at age 65.
The full retirement age in Germany is currently 65, but the new law drops it to 63 starting next year, for all workers who have paid their pension taxes for at least 45 years.
Germany is the world’s second-most productive economy, behind only the United States. But while U.S. per capita income has risen 28 percent in the past 10 years, Germans have enjoyed a 49 percent income increase, almost twice as much, over the same time period.
Germany's economy is heavily regulated, set up to prevent worker layoffs. German companies are often required by law to keep more employees on the payroll than they need, even in times of economic downturn. Nonetheless, German companies have remained largely profitable.
SOURCES: CNN, Forbes, Social Security Administration, Think Progress