The Strategist

DW: Germany urgently needs foreign workers

01/08/2018 - 04:28

The economic recovery led to record employment and exacerbated shortage of qualified personnel in Germany. This problem cannot be solved without labor migrants.

In 2017, Germany recorded a record low unemployment and a record high employment. Experts are confident that the boom in the German labor market will continue in 2018. This means that the deficit of qualified personnel, especially in some sectors and regions, will keep worsening, and firms will have to attract foreign specialists, including from countries outside the European Union.

As the Federal Labor Agency in Nuremberg reported on January 3, there were 2,385 million unemployed in the Federal Republic of Germany in December. This is 183 thousand fewer than in December 2016, and is 5.3% of the able-bodied population. Simultaneously, the agency revealed the average for the entire 2017 year. The number fell to 2.533 million (5.7 percent) and was the lowest since the reunification of Germany in 1990.

The day before, on January 2, the Federal Statistical Office (Destatis) in Wiesbaden published an average employment indicator for the entire 2017. The figure also turned out to be a record: 44.3 million people worked in the country’s territory in the last year. This is 1.5 percent or 638,000 more than the average in 2016. Such a massive leap in employment in Germany has not been observed for ten years.

All this resulted from many years of growth of the German economy. The latter accelerated noticeably in the second half of 2017, despite some difficulties with formation of the new government. In 2018, leading economic institutions predict further acceleration of GDP growth in Germany and, accordingly, an increase in employment. According to forecasts, it will exceed 45 million people in the next year and a half.

At the same time, experts do not count on further substantial reduction of unemployment in Germany. The fact is that the figure of about 5 percent is considered a sign of actually full employment in developed market economies. After all, there is always a certain number of people in the society, who find it difficult or impossible to find a job for various reasons, primarily because they do not have any qualifications.

Already, there are 761 thousand vacancies in the German labor market with 2,385 million unemployed (data for December 2017). And these vacancies become a brake on the economy’s development. According to a study by the Federal Association of Medium-Sized Businesses (BVMW) published at the end of last year, 40 percent of the enterprises surveyed stated that they had to give up orders because of a shortage of qualified personnel. And 89 percent confirmed that they have difficulty finding right employees.

These difficulties will increase even more in the coming months. At a press conference on January 3, the head of the Federal Agency for Labor Detlef Scheele said that German firms are expected to create 600 thousand new jobs in 2018.

Part of all these vacancies may be fulfilled with the help of registered unemployed if they successfully pass appropriate training or retraining. A certain part of the new jobs will be occupied by young people - graduates of various educational institutions. 
However, the domestic labor resources are clearly not enough to fully supply the country’s growing economy with the necessary personnel. Experts are unanimous: the German labor market requires constant replenishment of qualified foreign labor migrants.

The simplest way to replenish the labor force is to attract workers from EU countries, as they do not need any special permits as EU citizens: they have the same rights as the Germans. But recently, scientists have been increasingly warning that the potential of the EU countries has largely been exhausted. Moreover, as the euro area countries overcome consequences of the debt crisis and gain economic turnovers, the probability of an outflow of specialists coming to Germany back to their homeland increases.

Head of the Federal Agency for Labor, Detlef Scheele, said at the end of last year: "I will say with certainty: we will not do without in the coming years without attracting workers from third countries." Under the third countries, he meant states outside the EU.

Workers from these countries with a specialized education already now have the opportunity to find a job in Germany and obtain a residence permit. With the adoption of the immigration law, the process of attracting labor migrants (not to be confused with reception of refugees for humanitarian reasons) should become more orderly. In turn, conditions and criteria for admission of foreign workers will become more transparent and understandable.

Adoption of such a law is advocated by business, scholars, the labor agency and a number of parties. However, it is not yet clear when and in what form it will be adopted, since Germany still does not have a government approved by parliament that could draft a bill and take it to the vote.

Meanwhile, the deficit of qualified personnel is growing. In a press release published on January 3, the Federal Labor Agency indicates that in 2017 the largest number of vacancies existed in such sectors as transport and logistics, sales, metalworking, machine and automotive, energy, electrical engineering, construction and healthcare.