London (CNN Business) Almost 2 million workers in Europe's biggest economy are set for a big pay rise.
Three German political parties agreed to form a new government on Wednesday, with left-leaning Social Democrat Olaf Scholz set to succeed Angela Merkel as chancellorfollowing lengthy coalition negotiations.
As part of the coalition agreement, the country plans to raise its minimum wage to €12 ($13.46) an hour, from the current rate of €9.60 ($10.77) an hour.
The move could boost the income of nearly 2 million people in Germany who earn minimum wage salaries, or about 5% of workers, according to Carsten Brzeski, an economist at ING.
The minimum wage was already set to rise to €10.45 ($11.72) in July 2022.
The text of the coalition deal did not state when the bigger one-off increase will take effect. »