German labour market at a turning point

The German labour market is in the throes of radical change: for a long time, efforts focused on combating the high level of unemployment. In the 1980s and 1990s enough work needed to be found to feed the baby boom generation while today the low birth rates are the reasons for a shortage of qualified young talent. The issue of a shortage of skilled workers is increasingly moving into focus.

By the time the baby boomers enter retirement at the very latest, we could well be experiencing a drastic decline in the number of jobs on offer. If no countermeasures are applied, the shortage of skilled workers that can already be seen today in technical professions, certain craftsman trades and nursing care will spread to more and more sectors and intensify. The transformation in the age structure of our society offers a chance to get a lasting grip on the problem of unemployment. However, a worsening shortage of skilled workers is no less problematic: even today, more and more companies are having to postpone or completely reject orders because of a lack of qualified staff. If companies actually shy away from investments despite good sales prospects, this decelerates the potential growth of the entire economy.

Digitalisation can contribute towards more efficient production and thus reduce the manpower requirement. However, the necessary qualifications are also changing: The “digitalisation losers” are expected to include, for example, simple office activities, shop sales, the food trade and vehicle drivers, while demand for qualifications from the MINT subjects mathematics, IT, natural sciences and technology is likely to remain strong. However, the digitalisation-induced improvement in labour productivity alone will not suffice to successfully tackle the shortage of skilled workers. The problems can only be solved with measures such as an immigration law for skilled workers, a better work-life balance and incentives to work longer. A digitalisation-friendly environment also needs to be created that includes training programmes, nationwide expansion with high-speed internet and greater research funding.

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