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Germany's labor shortage

Chris CottrellSeptember 2, 2015

The thousands of refugees pouring into Germany every day could offer Europe's largest economy an opportune solution to plug the 'gray gap' in its aging workforce. But integrating the new arrivals could be costly.

Deutschland, Flüchtlinge in München
Image: picture-alliance/dpa/S. Hoppe

In Germany, two things are consistently low. One is the unemployment rate; the other is the birth rate.

At 6.4 percent, the number of jobless people looking for work defies labor data in other European countries whose economies aren't nearly as robust. But the birth rate, one of the lowest in the world, is a lamentable statistic that poses a strong dilemma for German employers.

How long will it take, managers here wonder, for Germany's economic prowess to erode once older workers start retiring without anyone to replace them?

From refugees to colleagues

On the other hand, the legions of refugees fleeing war in the Middle East and despotic regimes in Africa might just provide a badly needed source of labor that could help Germany overcome its looming demographic crunch, the government said Tuesday.

Labor Minister Andrea Nahles told journalists that although the labor market on the whole continued to be "an important anchor of stability in Germany," there were many areas of the German economy that had a shortage of skilled labor.

"We want to use this situation to open up the opportunity of a new and better life in Germany for the refugees who have come to us legitimately," Nahles told reporters as she presented the lastest official data on Europe's largest economy.

"Our aim must be to put the people who have come to us into decent work," she added. "The people who are coming as refugees should quickly become neighbors and colleagues."

Business leaders for their part have called on the federal and state governments to more smoothly integrate the new arrivals into the German workforce.

Ingo Kramer, the head of the Confederation of German Employers' Associations, said swiftly getting refugees vocationally trained was "in our own interest," while Stefan Körzell, an executive board member of the German Trade Union Confederation, said they should also be protected by minimum wage rights.

A polarizing debate

But in order to do this, Germany would have to allocate an additional 1.8 billion to 3.3 billion euros ($2 billion to $3.7 billion) in 2016 alone for language classes for refugees and benefits during vocational training. By 2019, Nahles said, that figure could rise to 7 billion euros.

At the press conference, Nahles also said the expected rise in the number of people granted asylum in Germany could also increase the number of people eligible for job-seeker benefits by 240,000 to 460,000 in 2016.

Within four years, that figure could rise to 1 million extra people entitled to social benefits known as "Hartz IV" as they look for a job or are unable to work.

The extra costs are likely to stir a debate in Germany, where opinions toward Europe's migrant crisis and Germany's role therein are divided. Many urge Berlin to do everything in its power to help those fleeing war and poverty, while others fear too much immigration could water down wages and Germany's national culture.

There has been both an outpouring of support for refugees in Germany and a violent backlash against them, often manifesting in arson attacks against dormitories meant to host the asylum seekers and their families.

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