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Germany's €13.90 Minimum Wage for 2026 Prompts Layoff and Price-Hike Plans, Ifo Survey Finds

Hospitality and retail report the heaviest exposure, underscoring uneven impacts across sectors.

Overview

  • Ifo’s October survey of roughly 4,600 companies found 37% say they are directly affected by the 1 January 2026 increase.
  • Among affected firms, about 21.7–22% plan job cuts, roughly half expect to raise prices, and around 27.7–28% foresee lower investment.
  • Planned reactions are sharper than before the 2022 rise, when only 10.6% of affected firms anticipated layoffs.
  • Exposure is concentrated in hospitality (77% of firms), retail (71%), textiles (62%) and food (59%), with construction and machinery largely insulated by higher sector pay.
  • The share of employment directly hit is smaller—15.5% within affected firms and 5.8% economy-wide—and the linked Minijob limit will rise to €603 in 2026 and €633 in 2027, prompting payroll updates.