Merz is left of Biden on some big issues, like being in favour of universal health care, and supporting unions and workers rights.

That’s debatable. Merz clearly wants to weaken worker’s rights and unions, and he doesn’t exactly want to expand access to health services, either (the German health sector is quite troubled in many ways and the anti-immigration policies really don’t help). His public stance on those issues is limited because of somewhat more progressive forces in his party and the established state of things in Germany, if he had free reign he would act quite differently.