Germany needs to do more to attract qualified professionals from abroad to remain competitive and avoid a drag on economic growth, the Organization for Economic Cooperation and Development said in a report.
While Chancellor Angela Merkel’s government has taken steps to ease immigration rules for highly qualified professionals, Germany needs to open up the labor market to workers without a university education, the OECD said. Nurses, electricians, train engineers and plumbers are among the professions in short supply, Labor Minister Ursula von der Leyen said in Berlin.
“The immigration system does not take into account the need for persons with medium qualification levels,” OECD Deputy Secretary General Yves Leterme told reporters at the report’s release today. “This is a particular problem for small and medium-sized companies that are already suffering acutely from a lack of qualified workers.”
While Germany serves as Europe’s engine of growth, the country’s economy risks running out of steam as an aging population and low birth rate threaten to shrink the workforce. Merkel has said the demographic challenge facing Europe’s biggest economy is a priority for 2013, an election year.
In 2020, 40 percent fewer people will join the workforce than will go into retirement, the OECD said in its report. About 8.1 children were born for every 1,000 German residents in 2011, according to the European Union’s statistics office, Eurostat, below the EU average of 10.4 children for 1,000 residents.
Debt Crisis Moves
For all Germany’s persistent demographic difficulties, the economy’s relative resilience has led to a jump in immigration from southern European countries hurt by Europe’s debt crisis, von der Leyen said.
Germany’s unadjusted jobless rate dropped back to a two- decade low of 6.8 percent in January. In Spain, unemployment reached a record 26 percent the same month as the number of people registering for jobless benefits rose to 4.98 million, the Labor Ministry in Madrid said today.
The number of employees in Germany from Spain, Greece, Portugal and Italy rose by 7.6 percent in 2012, von der Leyen said. Even so, immigration from eastern European countries is growing at the fastest pace, with a 29 percent surge in workers from the EU’s eastern members.
There are currently 850,000 job vacancies in Germany and the average time to fill them increased to 76 days, according to the labor minister.
The impact is already seen in small and medium enterprises, which skip investment due to the lack of skilled workers, Leterme said.
A further issue is German companies’ lack of experience in hiring from abroad even though the country’s immigration rules are now among the most lenient in the OECD, the report said. In a 2011 survey of more than 1,100 employers, nearly 50 percent said they had never thought of the possibility of hiring abroad and more than 30 percent said the process was too complicated.
“If Germany doesn’t tackle the immigration challenge the right way, there will be a very negative impact not only on potential growth but also on real economic growth,” Leterme said.
© Copyright 2022 Bloomberg News. All rights reserved.