Since 21 November 1953, a federal regulation has governed the prices of public contracts in Germany. It is called Verordnung PR Nr. 30/53. Its first rule is that market prices come first. Where no market price can be established, or where competition among suppliers is restricted, the state and the supplier may agree a cost-based price, a Selbstkostenpreis. Such a price must be based on the supplier’s appropriate costs. An annex sets out how to find them, the Leitsätze für die Preisermittlung auf Grund von Selbstkosten. Its chapters list the parts of the price one by one: materials, wages and other personnel costs, depreciation, interest, risks, and finally a calculated profit. The price authorities of the states may audit the price and inspect the supplier’s documents. A revised version took effect on 1 April 2022.
economics
Socially Necessary Labor Time
In the first volume of Das Kapital, published in 1867, Karl Marx asks what sets the value of a commodity. His answer is a quantity of time. Es ist also nur das Quantum gesellschaftlich notwendiger Arbeit oder die zur Herstellung eines Gebrauchswertes gesellschaftlich notwendige Arbeitszeit, welche seine Wertgröße bestimmt. It is only the amount of socially necessary labor, or the labor time socially necessary to produce a useful thing, that determines the size of its value. Marx defines this time precisely. It is the time needed to make a thing under the normal conditions of production, with the average skill and intensity of the society. A slow or clumsy worker does not make his product more valuable.
The Natural Wage on a Gravestone
Johann Heinrich von Thünen was a Mecklenburg landowner and economist. In 1826 he published the first part of Der isolirte Staat, The Isolated State. The second part followed in 1850, the year he died. In it he looked for the naturgemäße Arbeitslohn, the natural wage. He did not mean the wage the market happened to pay. He meant a wage that could be derived. His answer was a formula, the square root of A times P. A is the value of what labor and capital produce. P is what the worker and his family need to live. Thünen wished the formula to be placed on his gravestone. It is there today.
Concerted Action
On 14 February 1967, at the suggestion of economics minister Karl Schiller, representatives of the state, the unions, the employers and academic economists met for the first time in a Konzertierte Aktion, a concerted action. The purpose was to coordinate what each side did in economic and social policy. It never became a permanent institution. In 1977 the unions left in protest, because the employers’ associations had challenged the new co-determination law before the constitutional court. In 2022, with prices rising after Russia’s attack on Ukraine, Chancellor Olaf Scholz brought the format back. The first meeting took place on 4 July 2022. Scholz called it a good step to continue diese wichtige Tradition der Sozialpartnerschaft, this important tradition of social partnership. He described its method as Unterhaken, linking arms.
Public Pay Tables
The pay of federal employees under the collective agreement TVöD is published in a table that anyone can read. The table valid from 1 May 2026 has pay groups from E 1 to E 15, most of them with six steps. In group E 13, the monthly pay is 4,901.11 euros in step 1 and 7,025.87 euros in step 6. The move to a higher step depends, as a rule, on the length of professional experience. An employee moves from step 1 to step 2 after one year, and from step 2 to step 3 after two more years. Step 6 follows after five years in step 5. From step 3 onward, good or poor performance can shorten or lengthen the time before the next step.
The Gender Pay Gap
In 2025, women in Germany earned 22.81 euros gross per hour on average, and men 27.05 euros. The difference was 16 percent. The Federal Statistical Office also calculates an adjusted figure. About 60 percent of the gap is explained by factors such as part-time work, the sector and the requirements of the job. The part that remains unexplained is the adjusted gap, 6 percent. The office calls it an upper limit for possible pay discrimination against women. Equal Pay Day marks the gap each year. In 2026 it fell on 27 February. Until that day, women had worked 58 days of the year without pay, in statistical terms.
The Fewest Hours in the OECD
In 2024, a worker in Germany worked 1,331 hours on average. That was fewer than in any other OECD country. The OECD average was 1,736 hours. The German Economic Institute points out that countries measure working time in different ways. It also looked at the figure per person of working age, which takes account of how many people work. By that measure, Germany worked 1,031 hours in 2022, almost 200 hours below the OECD average.
Holiday Money
On a five-day week, the Federal Leave Act gives 20 days of leave a year. Collective agreements, with few exceptions, give 30. Many employees also receive Urlaubsgeld, holiday money, an extra payment for the holiday. In an online survey by the WSI institute published in 2026, 73 percent of employees with a collective agreement received it, and 35 percent of those without one. In the collective agreements the institute examined, the amounts range from 186 euros in agriculture in Mecklenburg-Western Pomerania to 2,904 euros for salaried employees in the wood and plastics industry of Westphalia-Lippe.
Who Hears About Your Money
Über Geld spricht man nicht. “One does not talk about money.” In May 2026 the polling firm YouGov asked 2,094 people in Germany with whom they talk about nine money topics. The answers form rings. Between 42 and 56 percent talk with their partner, depending on the topic. With close family the share is 22 to 44 percent, with friends 11 to 35 percent, with the wider family 4 to 14 percent, and with colleagues 3 to 14 percent. On their own income, 53 percent talk with their partner and 17 percent with friends.
Colleagues are not entirely outside the circle. In a 2023 survey of 3,000 skilled workers for the job portal meinestadt.de, 53 percent said they did not talk openly about pay with colleagues, which means close to half did.
Wages Are Not the State’s Business
Article 9 of the Basic Law protects the right to form associations to improve working and economic conditions. From it follows the Tarifautonomie, under which unions and employers set wages free from state interference. A statutory minimum wage arrived only on 1 January 2015, at 8.50 euros an hour. Its adjustments were left to a commission in which unions and employers each have three voting members. In 2022 the Bundestag instead raised the minimum wage by law, to 12 euros from 1 October. When the plan was presented, the president of the employers’ federation BDA, Rainer Dulger, called it a grobe Verletzung der Tarifautonomie, a gross violation of bargaining autonomy. The federation complained that the increase was set without the commission that was actually responsible.