Germany scraps plans to entice highly skilled workers
30 October 2006
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At the beginning of the summer, German businesses attempted to convince the government to alter immigration policies to attract more skilled immigrant workers. A discussion over the past months on the long-term issue and proposed plans have now come to an end.
The Ministry of Labor, via the spokesperson for domestic policy issues of the Social Democratic Party, has decided that current requirements for immigrants will remain unchanged.
For several years data has been emerging that shows Germany suffering on several economic and skills fronts. Businesses have been complaining that they regularly fall short of the workers required to bid for contacts. Some have claimed that entire contracts have fallen through due to lack of skilled workers.
Internally, Germany is experiencing difficulties retaining its own students. Over 145,000 Germans emigrate out of Germany annually at this time, the highest levels since immediately after World War II. Even more serious, more than 50% are under the age of 35, part of the most productive skill set of any population.
German youths have long complained that they cannot find work that pays enough for the high cost of living in Germany. Taxes are high, the cost of living is high, yet entry-level wages are low. Often companies attempt to rely on unpaid internships to fill positions, effectively placing all expenses back on the government.
Europe's biggest economy has suffered record unemployment in recent years, with the seasonally-adjusted jobless rate currently at nearly 11%.
About 579,000 foreigners immigrated into Germany last year, but the vast majority were low-skilled workers or various other categories. Only 900 highly qualified workers were granted residence in 2005.
Immigration levels were down 4% from the previous year and represent the first time ever they have dipped below 600,000 since reunification in 1990.
Businesses claim that the minimum wage for highly skilled workers required for immigration is too high (85,000 euros annually). This past week, the proposal to lower the wage to 63,000 euros was scrapped. A slight lowering of academic and skill requirements died with it.
For comparison, only 5% of Germans live in the 85,000 Euro and up income bracket.
Previously, domestic policy experts in the German coalition government had agreed to make it easier for academics and highly qualified workers to come to Germany.
It is not certain what will happen next. Given the current trends, Germany's best and brightest will continue to leave to seek jobs and establish businesses elsewhere. They have few incentives to return. The least skilled and undereducated remain.
At the same time, German immigration policies do not favour highly skilled or educated immigrant workers.
Business leaders and some government officials maintain the solution, or part of it, is to open up the German job market to more immigrants. They say that Germans and the German government must make Germany a more attractive country to come to.
The German population is both aging and shrinking, and experts are predicting labour shortages and rising retirement costs in the next decade. Statistically, 10 million Germans will leave the German labour market by 2050, placing even further strain on resources.
Canada and Australia have addressed the problem by establishing points-based skill qualification systems, which is being emulated by the UK in its current immigration reform efforts. With New Zealand and several other European Union nations, a highly competitive global immigration market has developed.
Germany risks being left behind if serious reforms aren't considered and implemented soon. Without reform, business leaders claim that Germany has little chance keeping its spot as one of the biggest economies in the world.
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