The labor shortage is keeping Germany awake. Europe's leading economy has been suffering for years with a serious problem of lack of personnel, which for various reasons is becoming more urgent and makes the Government of Chancellor Olaf Scholz look abroad again in search of a solution
Since the beginning of 2023, this country has registered an average of 773,087 advertised and unfilled jobs, according to official data from the Federal Employment Agency (BA), although it is possible that there are many more, since not all small employers necessarily notify a vacancy for which they have not found a worker. Meanwhile, the Association of German Chambers of Industry and Commerce (DIHK) notes with concern in a study at the end of 2022 that "the shortage of skilled labor is increasing".
The problem particularly affects what is known as Mittelstand, the network of small and medium-sized companies that drive the country's economic power. But the powerful brands of big industry also notice the shortage of cash when it comes to stocking their templates. A recent report by the Ministry of Economy on the labor market warns that the shortage of qualified workers is "severely affecting" the growth potential of many German companies. "More than 50% of companies see it as the biggest threat to developing their business", the report points out.
Germany needs skilled workers such as millers, turners, masons, mechanics, plumbers, carpenters, electricians and metal workers, but also doctors and health personnel, especially geriatric nurses, for hospitals and homes for the elderly; kindergarten and early childhood education teachers; social work professionals; train, truck and bus drivers; heavy machinery and energy technicians; waiters and hospitality and tourism professionals, and engineers and specialists in MINT disciplines (German acronyms for the fields of knowledge of mathematics, IT, natural sciences and technology), among other profiles.
New factors are conjured up so that an already endemic shortage situation has become very worrying, because, as Stefan Hardege, DIHK labor market expert points out, the problem of the lack of qualified workers has ceased to be a matter of certain economic sectors. "Now it's a problem that exists in all sectors, it affects very diverse professions", points out Hardege.
The most recent cause of this unmet demand diversification is the coronavirus pandemic. At that time, and despite the protective measures of the Government of the then Chancellor Angela Merkel, many companies lost workers, or dismissed them temporarily, especially in the service sector. And when activity picked up, those workers did not return, many times because they took other paths. Example: in 2020, the first year of the pandemic, in the hospitality and catering sector almost 390,000 employees – that is, half of the total then – left or lost their jobs, and many then migrated to sales, logistics or company administration.
But the underlying reality is that the high number of vacant jobs had been steadily increasing even before the pandemic for a structural reason, which will continue to shape the situation in the future: demographics.
The very large generation of baby boomers – those born in the 1950s and 1960s, when there was a post-war birth explosion in Germany – represents a third of the population of 83.2 million inhabitants, and also represents a third of the employed population, which is 45.6 million.
The baby boomers are embarking on the progressive path to retirement, which for the last will culminate around the year 2035. And there are not enough young people to take over. The Employment Research Institute of the University of Dortmund (Ifado) calculates that in 2035 Germany will lack the voluminous number of seven million qualified workers.
"We must try to make better use of the potential that exists within the country, because both solutions are needed: more qualified foreign workers and more employed Germans, although all of this will probably not be enough given the demographic evolution", continues Stefan Hardege .
Each year around 350,000 people leave the workforce, and labor market experts estimate that Germany would need 400,000 foreigners per year over the next decade to close an ever-widening gap. In 2021 the number of foreign workers who arrived in Germany was higher (see graph). 1.94 million people arrived in the country, of which 1.65 million came from EU countries (for example, 43,000 Spaniards) and 295,000 from the rest of the world.
But not all of them joined the skilled technical jobs that Germany is looking to fill, quite a few are there for a temporary stay and it is not clear that they intend to stay and work in Germany permanently. The difficulty of the language, the unrepentant bureaucracy, the importance of family reunification and fitting into German society are pitfalls mentioned by foreign workers who have made the move.
The paradox of Germany, a country with a low unemployment rate (5.7% this April), is that its unemployed, who are about 2.5 million, do not access vacant jobs. "We often see that the qualifications of the unemployed do not match what the companies are looking for", laments specialist Stefan Hardege.
There is also an internal cause that is difficult to diagnose. Germany's system of dual vocational training, admired around the world, faces a growing lack of apprentices. In the dual FP, the student studies in a vocational training center and learns the trade on site in a company. The Institute of German Economics (IW), a private institution in Cologne, underlines that in 2021 only 473,064 apprenticeship contracts were signed in companies and workshops, a drop of 10% compared to 2013.
This has profound implications for the economy, as these apprentices nurture the ranks of skilled workers that industry needs. Experts warn that the dual system, after decades as a fundamental pillar of Germany's economic strategy and a successful way to access the labor market, is losing appeal for young Germans.
In this vein was the speech that Chancellor Scholz gave this May Day, Labor Day, at a meeting of the German Confederation of Trade Unions (DGB) in Koblenz. Scholz recalled that "some are already talking about the shortage of workers as the big problem of the future" in Germany, and argued that one of the recipes is to ensure that dual vocational training works well, that "all young people who are looking for a they can find a training place", with which he invited companies to increase training places.
Europe's leading economy is fending off the risk of recession much better than expected at the start of the energy crisis due to the Russian gas cut due to the war in Ukraine. But at the same time he suffers and regrets not being able to fill all the job vacancies that arise in his prosperous labor market, a situation that can be seen even in everyday life, when citizens notice that there is a lack of hairdressers or cobblers in the neighborhood.
