How the Minimum Wage is Killing Off Farmers

Germany’s famous Spreewald gherkins, so iconic a regional speciality they receive the EU’s Protected Geographical Indication, are under threat. International competition is not to blame, not yet, rather it is the country’s own politicians introducing a higher minimum wage that concern Brandenburg’s vegetable farmers.

The Local reports that gherkin producers have warned that Germany’s new minimum wage, introduced as part of the coalition agreement by the Social Democratic Party (SPD) is forcing prices up and sales down.

Around 4,000 seasonal workers arrive from from Poland and Romania during harvest season. Before the new law brought the phased introduction of new pay scales for the agricultural sector into force, gherkin pickers were paid €5.00 an hour. That sum represented 2 to 3 times what was on offer for agricultural workers in their home countries according to one gherkin producer as reported in Berliner Morgenpost. Now they receive €7.20 an hour now jumping to €7.90 at the start of 2016 and further to €8.60 in 2017.

In response to the increased costs producers have been forced to raise prices. There is increasing concern that this will mean consumers stop buying the iconic product threatening the future existence of the Spreewald gherkin. This year alone gherkins production has fallen 20 per cent, around 8,000 tonnes.

“More than 200 years of tradition will come to an end if consumers don’t carry on buying our gherkins,” said pickle-maker Konrad Linkenhell, “because of higher wages the raw ingredients have become massively more expensive – by more than a half. It’s a disaster.”

Citing the effects of minimum wage in the Netherlands, Linkenhell continued:

“Almost immediately the gherkin industry disappeared, which is why new opportunities arose in Germany. Gherkin production will disappear and move to Eastern Europe, Turkey, India or Vietnam.”

The German Trade Union Confederation (DGB) disagrees. It doesn’t agree that the minimum wage is a threat, instead believing that consumers are prepared to weather the extra cost. According to Lothar Judith, DGB chair in Cottbus:

“Anyone who doesn’t pay its work force enough to live well on doesn’t have a right to exist.”