BERLIN (Reuters) - Leading economic institutes will warn in their twice-yearly forecasts that the German government’s plans for a nationwide minimum wage will cost 200,000 jobs next year, according to a newspaper report released ahead of publication on Thursday.
The institutes, whose analysis flows into the government’s own economic forecasts, also revised up their forecast for 2014 growth in Germany, according to another newspaper with knowledge of the study.
“About 200,000 jobs will be lost through the implementation of a minimum wage of 8.50 euros (6.98 pounds) an hour next year,” Der Tagesspiegel newspaper cited from the institutes’ report.
Critical of the economic policies of the right-left coalition government, which also include pension reform, the institutes had already warned about the effects of a minimum wage in their October analysis, pointing to significant job losses in East Germany.
The country’s cabinet of Chancellor Angela Merkel’s conservatives and Social Democrats (SPD) agreed last week to a national minimum wage of 8.50 euros per hour, green lighting a flagship project for the SPD.
Handelsblatt reported the institutes expected Europe’s largest economy to grow by 1.9 percent this year and 2.0 percent next year after expanding by just 0.4 percent last year.
The institutes publish their joint study on Thursday.
Reporting by Alexandra Hudson, Michelle Martin and Annika Breidthardt; Editing by Toby Chopra