Population Extinction: Why Does Germany Need Refugees?

Germany’s shortage of skilled workers worsened last year, as employers struggled to fill hundreds of thousands of vacancies in various sectors, a new report found.

The report, released by The Cologne Institute for Economic Research, also highlighted the crucial role of immigration in sustaining the country’s labor force.

According to the report, about 630,000 job openings remained unfilled in 2022, despite the slow economic recovery from the pandemic.

The demand for workers was especially high in fields that required higher levels of education and training, such as IT, electrical engineering, and construction planning. In these areas, nine out of ten positions faced a shortage of qualified candidates.

But the skills gap was not limited to technical or engineering jobs. The report also noted that health, social services, teaching, and education were among the sectors that suffered from a lack of skilled workers.

Even industries that were less affected by labor shortages in the past, such as trade, tourism, and hospitality, saw a sharp increase in unfilled vacancies last year.

The report’s authors, from the IW’s Competence Center for Securing Skilled Workers (KOFA), said that Germany needed more immigration to address its demographic challenges and maintain its economic competitiveness.

They pointed out that the growth in employment figures in March, which reached a record 45.6 million people nationwide, was largely driven by migrants, especially those from outside the European Union.

“Even if we raise all domestic potential, this will not be possible without further immigration, also for demographic reasons,” the head of the Federal Employment Agency, Andrea Nahles, explained. “We need immigration of both labor and skilled workers."

 

No Workers

The study estimated that there were 1.3 million vacancies for qualified professionals in 2022, but only about half of them could be filled by the available labor force.

The other half—some 630,000 jobs—remained unfilled because of a mismatch between the skills and experience required by employers and those possessed by jobseekers.

The study underscored the magnitude and complexity of the challenge facing the German industry as it tries to rebound from the pandemic and cope with demographic changes.

While Germany has a total of 2.5 million unemployed people, only one million of them are classified as skilled workers, according to the study.

Moreover, the distribution of skilled workers across regions does not always correspond to the demand for them. And the most highly qualified workers—those with expert-level knowledge and skills—are in especially short supply, with 60 percent of these positions going unfilled.

The study also identified some of the sectors that are most affected by the skilled labor shortage.

The education and social services sector, which includes teachers and childcare workers, had the highest proportion of unfilled vacancies among skilled workers in 2022, according to the study.

About 60 percent of the 163,000 jobs offered in this sector could not be filled by qualified candidates.

The study projected that this gap would widen in the coming years, as Germany faces a growing demand for education and social services due to its aging population and low birth rate.

By 2028, the study estimated that Germany would need an additional 200,000 childcare workers and 250,000 teachers.

 

Too Many or Too Few?

As Germany faces a shortage of workers in various sectors, refugees have become a valuable source of labor for small and medium-sized enterprises.

But bureaucratic hurdles often prevent them from fully integrating into the economy and society, according to a report by a federal agency.

A report issued on June 30, 2022, by the Labor Market and Research Institute of the German Federal Employment Agency said that 1.9 million refugees from different countries were living in Germany as of May 2022.

Of those, 40.4 percent were of working age (between 16 and 67 years old) and had found jobs, while 29.9 percent were unemployed and 48.5 percent relied on state subsidies as of March 2022.

The report also included data on more than 966,000 Ukrainian refugees, of whom 19.1 percent were employed, 10.7 percent were unemployed and 5.5 percent received state subsidies.

Syrians accounted for the largest group of refugees in Germany, followed by Iraqis, Afghans, Eritreans, and Iranians, the report said.

One of the areas where refugees have filled a gap is the transportation sector, which suffers from a severe shortage of drivers, especially for buses and trucks.

The report said that refugees had been able to enter the labor market thanks to their skills and qualifications.

However, the report also highlighted the challenges that refugees face in accessing education, training, and recognition of their degrees and certificates.

It said that many refugees had to deal with complex administrative procedures, language barriers, and discrimination.

The report recommended that Germany should improve its integration policies and offer more support and guidance to refugees who want to work or study in the country.

 

Humanitarian or Economic?

Germany’s official stance on accepting refugees is that it is a humanitarian duty, not a labor market strategy.

But as the country grapples with an aging population and a shortage of workers in various sectors, some experts say that integrating refugees into the workforce is vital for social stability and economic prosperity.

“German society is aging, and it already suffers from a significant shortage of people,” said Ulrika Wieland, a researcher at the Bertelsmann Foundation, an independent think tank, in media statements.

She said that bureaucratic hurdles make it hard for employers and companies to find employees among the refugees.

Germany has one of the lowest birth rates in the world, at 1.38 children per woman, and one of the highest life expectancies.

Since World War II, its population structure has been skewed by these factors, creating a need for immigration to fill the gap.

Between 1989 and 2009, two thousand schools were closed because there were not enough children.

Every year, 850,000 workers retire, while only 800,000 students enter school. Children now make up only one-third of the adult population.

The spokesman for the German Federal Ministry of Labor and Social Affairs said that while there are no government plans to use humanitarian migration as a labor market tool, integrating refugees into work is an important aspect of social inclusion.

He said in media statements that the government aims to provide equal opportunities and long-term prospects for refugees in the German labor market.