THE BLOG

Germany Adopts the World's Best Minimum Wage

07/03/2014 10:19 pm ET | Updated Sep 02, 2014

This week, the German Bundestag adopted Germany's first minimum wage and a model for the global economy. At €8.50 ($11.60) per hour it is not only among the highest minimum wage rates in the world (France, Belgium and Luxembourg) more importantly it is a model in other ways. The new law includes a minimum wage commission that includes management and labor. The new law also encourages sectoral collective bargaining for agricultural, personal care workers and others that have not had collective bargaining for decades.

Remarkably all political parties in Germany supported this remarkable law. Chancellor Angela Merkel and Economic Minister Sigmar Gabriel from the Social Democratic Party supported this together, as did the Green and Left parties.

The expansion of collective bargaining will mean that about 80 percent of German employees will be covered by collective agreements, compared to 12 percent of workers in the U.S. and just 6.6 percent in the U.S. private sector alone. The 2012 Republican national platform called for further attacks on collective bargaining rights in the U.S., already the smallest coverage among global democracies.

Obscene levels of economic inequality are well documented in the U.S., but all too often even our president equates that with attacks on poverty rather than establishing a real opportunity for working women and men to have their own share of the American dream. Ending poverty is important, but an opportunity to participate in the global economy and to have an effective voice is at least as important as a higher minimum wage.

If Merkel and her Christian Democratic party can help lead this effort in Germany, and with real results, what accounts for the 19th century U.S. framework of free markets, free trade, elimination of collective bargaining, and the destruction of economic opportunity for all but a few Americans?

Most of the answer lies in corporate leadership and investors who cannot help themselves from demanding higher profit,s even if revenues are not growing. We have a diminishing sense that we share a nation and a society.

But U.S. unions and others seeking social change are also part of the problem. We are trapped in old ways of describing the problem and seeking change. Merkel can embrace collective bargaining in part because the German unions, the strongest in the world, operate much more in a culture of voluntary membership and political pluralism. As collective bargaining faces extinction in the U.S., we must be ready to understand differences between U.S. unions and the much more effective ones in Germany and most other nations.

Unions also need to frame our debate much more in terms of economic opportunity and fairness, and stay focused on our core mission of promoting collective bargaining and democracy in the workplace and in the nation. Germany and Brazil in the 21st century must be more of a model for our own future strategies, rather than our own 20th century past.