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Easing labor migration rules threatens wages, unions say

March 18, 2023

Berlin plans to reduce labor shortages by granting more work visas to people from the Western Balkan states. But unions worry that this could lead to lower wages and worse conditions for unskilled workers.

Symbolbild | Fachkräftemangel in Deutschland
Image: Sebastian Gollnow/dpa/picture alliance

Germany is struggling with a chronic labor shortage. According to the Institute for Employment Research, there are currently 1.98 million job vacancies in the country. Now, Berlin plans to fill these gaps by liberalizing labor migration legislation.

This will include two changes to a provision called the "Western Balkans Regulation," which will not only be extended indefinitely from the current expiration date at the end of 2023 but the quota will also be doubled to include 50,000 job seekers annually.

No qualifications needed

When around one million refugees — mainly from Syria, Afghanistan, and Iraq — arrived in Germany via the Balkan route in late 2015 at the height of the so-called "refugee crisis," they were also joined by many people from six Western Balkan countries — Albania, Bosnia and Herzegovina, Kosovo, Montenegro, northern Macedonia, and Serbia. They filed about 30% of the asylum applications at the time, though their chances of acceptance were rather low: Only around 5% of them were granted.

To avoid costly repatriations, Chancellor Angela Merkel's government made an agreement with countries of origin for them to take on those who were deported and review the situations of those willing to leave in advance.

A care worker walks with an elderly patient down a nursing home hallway.
Germany desperately needs care workers from the Wester Balkan countriesImage: picture-alliance/dpa/O. Berg

In addition to this, the Western Balkans Regulation was introduced in 2016, providing for a set contingent of job seekers to work in Germany without major bureaucratic hurdles. Unlike skilled workers who look for work under the Blue Card scheme — this group does not need any qualifications.

There are two rules for these people: The application for a work permit must be submitted to German state representatives in those countries, and the job seeker cannot apply for asylum beforehand.

A win-win situation?

The regulation was intended to satisfy all sides, regulating the immigration of unskilled or medium-skilled workers into the German labor market while relieving the labor surplus in the countries of origin. In Kosovo, for example, the unemployment rate is just under 21% overall but reaches around 55% among young people. In Bosnia and Herzegovina, or in northern Macedonia, the youth unemployment rate is over 35%.

With numbers like that, it's no surprise that Germany's Federal Employment Agency had issued around 260,000 basic permits and 98,000 work visas to workers from the Western Balkan countries by the end of 2020.

Fear of 'wage dumping' 

The planned changes are intended to raise these figures further, a move that has been welcomed by employers who have been pressuring Berlin to liberalize immigration conditions to fill jobs.

The German Trade Union Confederation (DGB) is more cautious, however. While it welcomes labor migration, says Evelyn Räder, who is responsible for labor market policy on the DGB's executive board, the basic conditions for workers from the Western Balkans require special attention.

"The people who come are largely dependent on their employer. They have a residence permit that is linked to their job. That triggers fears that if they don't toe the line, they'll be sent back," Räder says.

In addition, they often don't speak German and are not informed of their rights. In practice, this leads to workers accepting worse working conditions, which can subsequently lead to "wage dumping," Räder says, referring to a German term for when wages are pushed lower than the market rate by cheap labor.

Laborers instead of skilled workers 

Three-quarters of workers from the Western Balkans find employment in construction, catering, and caregiving, including 44% in construction alone. Most of these are part-time jobs with relatively low wages.

Two construction workers carry a steel grid at a site in Bingen, Germany.
Three-quarters of the workers from the Western Balkans are in constructionImage: picture-alliance/dpa/B. Roessler

Although the federal government justifies reforming the labor law for foreign workers by saying that it wants to counteract the shortage of skilled workers, the Western Balkans Regulation deviates from this claim, as no qualifications are required to obtain a work permit.

According to the DGB's assessment, the aim is not to recruit skilled workers at all, but to attract laborers. "It is purely a labor procurement program for the benefit of employers, who gain workers this way, but can quickly get rid of them when needed," Räder says.

Precarious conditions

This situation is particularly pronounced in the construction industry. Last year, the main construction industry association terminated the extension of the decades-old collective agreement. Workers can now be paid a legally guaranteed minimum wage of €12 per hour, down from the previous hourly wages that averaged between €13 and just under €16 on construction sites.

Now employers pressure anyone demanding a higher wage with the fact that there is always cheaper labor, and without fear of lawsuits. Workers from the Western Balkans are a particularly vulnerable group. They do not know their rights, and for many even these deteriorating conditions are acceptable compared to the situation in their home countries. Moreover, there are practically no effective state controls.

Employee protection and collective bargaining at risk

"We fear that this will create pressure on the working conditions of all employees in the construction industry. It will become more difficult to reach good collective agreements, and without them, a dumping program to lower wages will simply emerge," Räder says.

The DGB suggests that the solution is further changes to the Western Balkans Regulation. One of the most important aspects would be the possibility of changing employers without having to reapply for a work permit — as is the case for other foreign workers.

Where did all the skilled workers go?

Under the current regulation, the application for a work visa must be made in the employee's country of origin, and the visa is ultimately issued for a specific job. Changing jobs is possible, but must be applied for again through the Federal Employment Agency. It's a complicated process that many workers aren't even aware is an option.

Unions are demanding that employment on the basis of the Western Balkans Regulation should only be possible where collective agreements exist. This would protect both the employees and the unions' collective bargaining autonomy.

The DGB has a clear message for people in the Western Balkan countries looking for work in Germany: "Inform yourself about your rights and ask for help if necessary," Räder said. "You don't have to accept everything that is offered to you. Here, workers really do have rights, too."

This article was originally written in German.

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Head shot of a man (Zoran Arbutina) with gray hair and a beard
Zoran Arbutina Editor, writer, reporter