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German Cabinet approves national minimum wage; goes into effect Jan. 1 2015

  • Germany Cabinet Merkel-1.jpg

    German Chancellor Angela Merkel pauses as she arrives for the weekly cabinet meeting at the chancellery in Berlin, Germany, Wednesday, April 2, 2014. (AP Photo/Markus Schreiber) (The Associated Press)

  • Germany Cabinet Merkel-2.jpg

    German Chancellor Angela Merkel works on her documents after arriving for the weekly cabinet meeting at the chancellery in Berlin, Germany, Wednesday, April 2, 2014. (AP Photo/Markus Schreiber) (The Associated Press)

  • 991ce187f651300c500f6a7067005043.jpg

    German Chancellor Angela Merkel reads in her documents after arriving for the weekly cabinet meeting at the chancellery in Berlin, Germany, Wednesday, April 2, 2014. (AP Photo/Markus Schreiber) (The Associated Press)

Chancellor Angela Merkel's Cabinet has approved a national minimum wage for Germany, guaranteeing workers at least 8.50 euros per hour ($11.75) starting next year.

Merkel's conservative bloc had been against setting a minimum wage, arguing instead in favor of regional pay deals by employment sector. But it agreed to establish one as part of the deal to form a government with the left-leaning Social Democrats.

Federal Labor Minister Andrea Nahles said Wednesday that a minimum wage "will provide greater fairness" in Germany and result in better earnings for some four million people.

The proposal, which is expected to get Parliamentary approval, would go into effect Jan. 1, 2015 and employers would have two years to phase it in.