Demographic Future Is Now Eastern Germany Confronts Skilled Labor Shortage
Part 2: Combating the Threat
Beginning in 2012, the number of people in the 20-to-64 age bracket will decline sharply. Economists refer to this group as the potential labor force. It includes everyone who is theoretically available to the labor market in an economy. By 2030, there will be 6.3 million fewer people in this group than there are today.
For employees, the initial consequences are not unpleasant. On the whole, wages will increase and the income gap between the East and the West will narrow. This is what the Dresden branch of the Ifo Institute for Economic Research expects, and so do others. "Wages will explode, especially for new hires," says industrial sociologist Burkart Lutz, adding that there will be a "substantial increase in average wages." At the same time, however, the lack of skilled workers creates "a substantial potential for crisis," especially for companies in eastern Germany, says Lutz. In the worst case, the region could be in for "another wave of deindustrialization."
Yvette Töpfer recognized that she had to be creative if she wanted to attract qualified workers to the company she runs, Glasbearbeitung + Beschichtung Neuhaus, which treats glass objects such as bulbs with temperature-resistant coatings for the automobile industry, among others. Business was stagnant until recently. Töpfer lacked a proper head of R&D, and innovation suffered as a result. She spent two years searching for candidates in the region, but it wasn't until she hired a headhunter that she found what she was looking for -- in the West. In the end, she even got the better of a giant corporation like BASF, which had also offered a job to her new employee. Markus an der Heiden, who holds a doctorate in chemistry, moved with his family from Darmstadt near Frankfurt to Neuhaus in Thuringia, where he was offered a higher salary than he could have earned in the West. The company also paid for his living expenses and trips home during his trial period. When his wife joined him in Neuhaus, the company made the necessary kindergarten arrangements for their child and is now paying the costs, as well.
Such princely treatment of new hires has been the exception to date. Unless Germany manages to compensate for a declining population by adding more women and older people to the workforce, as well as bringing in professionals from abroad, the entire country will be threatened with a downward spiral.
Better Offer in Potsdam
The threat is sufficiently real to have made an impression on politicians. Almost all ministries in the federal government are currently involved in eight working groups that address the lack of skilled workers in one way or another. In its fall report, the German Council of Economic Experts has emphasized, once again, the importance of the skilled worker issue. There is also no lack of proposals in the current debate, although concrete resolutions have been infrequent.
Economics Minister Rainer Brüderle, a member of the pro-business Free Democratic Party (FDP), wants to establish criteria for skilled workers interested in immigrating, preferably based on a point system. Labor Minister Ursula von der Leyen, a member of Chancellor Angela Merkel's Christian Democrats, wants to see more women and older individuals enter the workforce, as well as improved training for immigrants.
It still seems as if the discussion merely involves making a choice among various alternatives. But the real challenge will be for politicians to use all available instruments to successfully address the looming lack of trained workers in the future.
Germany is involved in an international competition for the resource of skilled workers. Among international managers, Germany currently ranks forth among producers of talent, behind the more populous countries of China, the United States and India.
This means that German companies must compete for every skilled works, like Coburg programmer Kühn, who plans to make a permanent move to eastern Germany soon. However, Kühn will not be moving to Eisfeld, where he works now, but to a town near Potsdam outside Berlin. He intends to leave his job at Analytik Jena, now that he's received a better offer in Potsdam.
Translated from the German by Christopher Sultan
- Part 1: Eastern Germany Confronts Skilled Labor Shortage
- Part 2: Combating the Threat