Analysis from a leading German thinktank suggests the country is going to need significant labor immigration in the coming decades to avoid critical shortages worsening. The report goes on to estimate that without an increase in foreign workers coming to the Germany, the overall labor force could shrink by 10% over the next decade.
Germany, like many wealthy nations, is facing a demographic crisis. With fewer children being born and people living longer, the long-term survival of the country’s social welfare systems is by no means assured. At the same time, the vocational workers of many industrial sectors underlying the German economy – think shopfloors – are steadily aging out of the workforce and entering retirement. Young Germans are not entering the trades in anywhere near the numbers needed to replace them and this has serious implications for the German economy.
German leaders are well aware of this fact, and have in recent years implemented a number of reforms to the country’s notorious bureaucracy and introduced new programs to try to get more people to come. There have also been efforts to ease people’s transition into the German workforce, from speeding up the process of qualification recognition to making foreign workers feel more welcome (a long-standing issue in Germany).
These efforts appear to have had some success. In 2024 the German government announced progress, with foreign qualification recognitions up and a record number of work visas expected to be given out. There is more in the works, with the government pledging to offer more work visas to Indian citizens and reportedly discussing other ways to get more workers into the country.
According to the influential foundation Bertelsmann Stiftung, however, this progress is likely not enough to keep Germany’s demographic problems at bay.
“Germany now has a very liberal immigration law,” said Susanne Schultz, a migration expert at Bertelsmann. “It must be implemented much better, however.”
According to the foundation, Germany needs almost 300,000 new workers per year until 2040 to head off the worst effects of demographic decline. The report recommends lowering barriers further and working more to improve conditions for people trying to settle into a new life and career in Germany. Without this massive increase in labor migration, the Bertelsmann analysts warn, the workforce could shrink by nearly 5 million people over the next decade.
While many German leaders in government and the business community are as one on the need for more foreign workers, the politics of the day threaten to throw another obstacle in the way of progress. After the tenuous coalition government fell into disarray earlier in 2024, Chancellor Olaf Scholz called snap elections for early 2025. His party, the social democrats, are trailing the once long-reigning Christian Democrats group, as well as the staunchly anti-immigration Alternative for Germany (AfD) party. Migration is one of the most dominant, if not the most dominant issue for many voters in the country. Senior figures in the Christian Democrats have taken firm stances against irregular migration to Germany, and with the growing influence of the AfD, many of whose members are against regular migration as well, these elections will likely be decisive in seeing how close Germany gets to the demographic cliff.