While the German economy is in recession despite low unemployment, Chancellor Olaf Scholz has identified the shortage of skilled workers as the main hurdle to regaining economic growth, which should be addressed by increasing immigration.
Despite Germany’s ‘technical recession’, which means it underwent two-quarters of negative growth rates, its unemployment rate is among the lowest within the EU, with only 2.9% of those between 15 and 74 unemployed in April, according to Eurostat data.
However, companies are struggling to find skilled workers.
“The shortage of skilled workers is probably the biggest obstacle to growth in our country,” Scholz said on Monday (19 June) at the “German Industry Days”, an annual business conference organised by the industry association BDI.
To address the issue, Germany’s federal government wants to foster the migration of skilled immigrants and attract talents from outside Europe.
“Immigration and freedom of movement in the European Union have helped us and brought us to where we are today,” Scholz said. “Now, however, that is no longer enough, and we have to look further afield in the world”.
On Monday, negotiators of Germany’s three party-coalition of social democrats, Greens and liberal FDP reached an agreement on a Canada-style point-based migration law that should enable skilled migrants easier access to the German labour market.
The reform is set to be adopted by the German parliament on Friday (23 June).
The new rules should “ensure that we always have control over migration, but at the same time give companies – small and medium-sized enterprises, craftsmen, and large companies – the opportunity to meet their requirements,” Scholz said.
The points, which are given for factors like work experience, age, language skills and relation to Germany, are meant to enable skilled immigrants to come to Germany even if they do not have a qualification formally recognised as equivalent to a German one.
The reform will also make it easier for foreign university graduates to obtain the EU’s “blue card” residence permit in Germany, by reducing the minimum monthly gross income level to €3.500.
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Asylum seekers can ‘change lanes’
As part of the new rules, people who came to Germany as asylum seekers will also get the possibility to take up work and even to switch into the scheme for skilled immigrants, given that they have been in an asylum procedure before the 29 of March 2023.
With the introduction of this reference date, the government wants to avoid a so-called “pull effect”, as it fears that the option to change the legal status from asylum seeker to skilled migrant could encourage people without a right to asylum to move towards Germany.
Nevertheless, conservative opposition parties CDU and CSU (EPP) called the reform the “completely wrong signal, especially in the current tense migration situation”.
“With the possibility of ‘changing lanes’ for up to 160,000 asylum seekers, the traffic light coalition now also mixes asylum and labour immigration,” Andrea Lindholz (CSU), deputy chair of the CDU/CSU parliamentary group, said in a statement.
“This solidifies the impression in the world that anyone who somehow manages to get into our country can stay,” her colleague Alexander Throm (CDU) added.
EU battles to find its place on future of immigration to bloc
In a bid to make the EU attractive to skilled non-EU migrants, the European Commission is proposing to promote EU permanent residency status for non-EU citizens, though some have questioned its impact as many immigration issues remain within the competencies of member states.
Mobilise domestic workforce
Instead of the envisaged immigration reform, “domestic potential must be activated more strongly, and people from the EU must be attracted to our labour market,” Lindholz said.
In Germany, 2.6 million young people below 35 still need a formal vocational qualification, which the government wants to address by better matching those leaving school with training opportunities.
Nevertheless, in the government’s view, this will not suffice to fill the gaps caused by the ageing population.
“From 2025 onwards, the high birth rate cohorts, the baby boomers, will retire,” Labour Minister Hubertus Heil (SPD/S&D) said in May. “That is why we have to pull out all the stops to ensure the availability of labour and skilled workers,” he added.
Sisyphus' skills shortage
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Scholz also drew a comparison to the “economic miracle” of the 1950s to 70s, in which Germany relied heavily on “guest workers”, with over 14 million immigrants coming to Germany from countries like Italy, Turkey, Spain and Greece, 11 million of which returned to their home countries.
“We have done it before in Germany when the labour shortages were great,” Scholz said, “and we will do it again”.
“We have long been a country of immigration,” he said, “and it will help our economy and our prosperity to continue to grow.”
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[Edited by János Allenbach-Ammann/Alice Taylor]
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