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Germany will create one of “Europe’s most modern immigration regimes” to address a worsening skills shortage that risks becoming a “real brake on economic growth”, the nation’s labour minister has said.
Hubertus Heil said the immigration reform was part of a broader campaign by the government of Olaf Scholz to attract global talent to Germany, arrest its demographic decline and resolve a dearth of skilled workers that is becoming the number one concern of some of its biggest companies.
In an interview with the Financial Times, Heil said many industries were “desperate” for staff, a situation that would “only get worse” as baby boomers retired.
“Germany will lack 7mn workers by 2035 if we don’t do something,” the labour minister said. “And that could end up being a real brake on our economic growth.”
The reform legislation, expected to be passed by parliament in the coming weeks, will make it much easier for foreign workers to take up a job in Germany, removing many of the regulatory obstacles to immigration.
But some business groups say it does not go far enough. “[It’s] too bureaucratic,” said Thilo Brodtmann of the VDMA, a machinery industry trade body. “The requirements for knowledge of German are, for example, still excessive.”
In recent weeks labour shortages have almost replaced supply chain bottlenecks as the main constraint on output for many companies across Europe, and especially in Germany.
The shortage of workers is limiting output at 42 per cent of Germany’s services companies, 34 per cent of its industrial groups and 30 per cent of construction companies, according to the latest quarterly survey by the European Commission.
The problem could be getting worse. A study by the German Economic Institute found the number of open positions in Germany for which no qualified unemployed person could be found reached a record 630,000 in 2022 — up 280,000 from 2021.
Experts think the skills shortage has also contributed to the recent wave of strikes that has paralysed Germany’s rail network and shut down some of its biggest airports. Inflation and the cost of living crisis have been the main triggers, but labour market tightness has given unions more bargaining power and emboldened them to resort to industrial action.
The government’s new immigration law would allow people to go to Germany for work even without a German professional qualification, Heil said. “It will be enough for them to have an employment contract, some professional experience and have received vocational training in their home country.”
Germany will also introduce a “chance card” allowing people to earn points based on their vocational training and experience, whether they have a connection to the country and speak German, and are younger than 35.
“When they have enough points they can come [here] to look for a job,” said Heil, labour minister since 2018 and one of Germany’s longest-serving cabinet members.
Another bill soon to be submitted to the Bundestag would make it much easier for foreigners to acquire German citizenship and allow them to retain other passports apart from a German one — currently impossible for non-EU nationals.
The government is also launching an international advertising campaign — under the slogan “Make It in Germany” — aimed at luring foreign workers into sectors particularly hard hit by the skills shortage.
Heil said he and foreign minister Annalena Baerbock would soon travel to Brazil to “tell people about the opportunities they have here, for example in the caring professions”.
Heil said he was also moving to tackle the rise in the number of unskilled people in Germany. The country prides itself on a “dual education system” combining theoretical classroom training with hands-on experience on the factory floor: many see the system as underpinning Germany’s economic success.
But fewer young people are taking up apprenticeships than in the past. Last year just 469,000 started training under the dual system, compared with 560,000 in 2011.
Heil said 1.6mn people between the ages of 20 and 30 have no vocational qualification. “And all too often these people end up in long-term unemployment.”
To combat this, the government has drafted a bill that he said would give all young people the right to a training position and provide financial incentives for them to enter an apprenticeship.
But experts say simplifying Germany’s complex rules for foreign workers will have the most impact on a labour market that the IAB think-tank says will require annual net immigration of 400,000 people by 2060 to maintain a steady supply of manpower.
Heil said the government was determined to avoid repeating the mistakes of the 1960s when a huge influx of Gastarbeiter — or guest-workers — came from countries such as Turkey but took years to be fully accepted by German society.
“We didn’t help them to integrate,” he said, adding immigrant workers were “not just workers”. “They want to be a part of society, with the same rights and obligations as everyone else.”
Germany had learned from the example of Canada, where immigrants were “treated like human beings” and had the chance to become citizens, Heil said. “We will do the same in Germany.”
Additional reporting by Martin Arnold in Frankfurt
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