Tackling Germany’s labour shortage

Germany is facing an immense labour shortage: leading research institutes calculated that its national economy needs 400,000 working immigrants net each year in order to secure prosperity and the German welfare system. Like most high-income countries (HICs) around the world, the EU’s largest economy therefore needs a significant increase in labour immigration and hence policies that attract workforce from around the globe. Otherwise, Germany will find itself in a situation where the great transformations of the future fail due to a lack of staff. In an era of change, there might simply not be enough workers to install solar panels or drive the buses operating in our expanding public transportation networks – at least when it comes to HICs.

With the new Skilled Immigration Act, Germany has now set course to tackle the long-term challenge of labour shortage. However, considering that most OECD countries face similar challenges when it comes to demographic changes and worker-to-old-age ratio, it is crucial to find solutions at the European level too.

The German Greens have promoted family-friendly immigration for many years, taking into account human rights and the interests of the countries of origin – which are often of low- or middle-income. In June 2023, just before the parliamentary summer recess, Germany implemented the most progressive immigration bill in its history. According to the new law, there will be three pillars through which immigration into the German labour market will be organised in the future: skilled labour, experience and potential.

The skilled labour pillar already existed in the Skilled Immigration Act of 2020, but salary thresholds will now be lowered, and it will be possible for recognised skilled workers to take up vacancies flexibly and across sectors.

Through the second pillar, the new immigration bill acknowledges professional experience and focuses less on equivalence to German vocational training, as this requirement has often denied qualified workers access to the German labour market – even when a contract had already been signed! From now on, it will be possible to work in Germany with proof of formal training of at least two years, which is recognised in the country of origin; two years of professional experience, acquired within the past five years; and a certain salary or employment according to union wages.

The third pillar focuses on the so-called ‘opportunity card’ (‘Chancenkarte’), agreed upon in the coalition agreement of the current government. Based on a points-based system, it is easier to come to Germany to search for a job on-site. Other immigration countries such as Canada or New Zealand have already experienced positive outcomes with similar points-based systems. Germany now follows their example to increase its visibility and appeal all over the world.

Of executive and legislative: do complex challenges require complex laws?

After the executive had adopted an earlier version of the new Skilled Immigration Act in March, the draft was submitted to the German parliament. During constructive negotiations, the Green parliamentary group was able to achieve significant improvements in the new law, together with their coalition partners from the Social Democrats (Social Democratic Party, SPD) and the Liberals (Free Democratic Party, FDP). These changes consider the potential of people outside as well as inside Germany:

• First, Germany opens opportunities for refugees to change their status from an ongoing asylum procedure directly to a residence title for employment purposes. In this way, the government enables social participation for those who are already in Germany, promotes integration and relieves the administrative burden municipalities and volunteers are currently facing.
• Second, the Skilled Immigration Act will lower the hurdles for skilled workers to bring their families along with them or to reunite with their families, especially their parents, in Germany.
• Third, bureaucratic barriers are abandoned: German residence law previously made it virtually impossible to change from short-term visas to long-term residency without leaving Germany – long application procedures and waiting periods included. This incomprehensible hurdle is now in the past and those who can show an employment contract and meet all requirements may start directly.
• Since 2016, Germany and the countries of the Western Balkans have had an agreement that enables citizens of the Western Balkan states to gain access to the German labour market, solely when an employment contract is provided. This partnership is a success story of labour migration. Therefore, the existing Western Balkans scheme will now be made permanent and the contingent will be increased from 25,000 to 50,000 applications per year.

Together with further amendments and an additional set of key issues (‘Eckpunkte’), the Skilled Immigration Act combines legal, operational and policy initiatives as proposed by the European Commission to attract skills and talent. The aim at the national, European and international levels must be to establish forward-looking migration policies – a project even more important in times of rising right-wing populism. The answer to the current shift to the right lies in finding and promoting sustainable solutions for the inevitable transformations of our time. This entails reducing bureaucracy, providing digital infrastructure, protecting human rights and developing partnerships at eye level. A lot remains to be done collectively at the national as well as at the European level; it is a complex challenge, but when it comes to immigration law, I would always argue for approachable legislation.

The views expressed in this #CriticalThinking article reflect those of the author(s) and not of Friends of Europe.