Distinction in travel journalism
Is independent travel journalism important to you?
Click here to keep it independent

6 Feb, 2013

FREE Download: OECD Report Says Germany Must Boost Immigration to Meet Looming Labour Crunch


A report issued by the Organisation of Economic Cooperation & Development (OECD) has called for major improvements in processes for attracting skilled migrant workers to Germany, especially to staff the small & medium sized enterprises. It says the entire system will need to be upgraded, all the way from the visa application process to the duration of the consideration period, the fees charged, the criteria and qualifications involved.

According to the report, “The German Federal Employment Agency forecasts – in the absence of change – a skilled-labour shortage of about 5.4 million by 2025, with skilled workers defined as those with vocational or tertiary qualifications. Its strategy to address this focuses first on mobilising the inactive population, particularly women and older workers. Most of the required increase is thus expected to come from the domestic labour market, including recent immigrants and their offspring, by enhancing labour market participation and increasing work hours. These sources, however, are unlikely to be sufficient to meet skill shortages and some recourse to labour migration is envisaged. According to Federal Employment Agency calculations, the migration channel is targeted to bring in up to 800 000 skilled workers by 2025, more than through upskilling.”

The main driver is changing demographics. Says the report, “The population in Germany is one of the fastest-aging and fastest- shrinking among OECD countries. Germany’s population has been declining since 2004 – although 2011 saw a slight migration-related uptick. Among OECD countries, only Hungary has seen a longer span in which its population has been declining. In 2010, 26% of the German population was over 65 years of age compared with 23% in other WesternEuropean countries, 19% in the Central European countries, and 17% in the United States. The share of youth aged 0-14 was just 14% compared with 17% in other Western European countries and 21% in the United States.

Labour force growth, which was positive over the past decade, is projected to turn negative over the current decade 2010-20. Germany faces a 4% decline in its labour force, while the change in Europe (on average) and in the United States is projected to remain positive. Part of this decline is due to much lower levels of immigration in Germany, based on the figures for the past few years.”

Says the report, “Germany is expanding its horizon for recruitment beyond the traditional origin countries in Europe, but faces challenges. It has lagged behind in competing internationally for highly skilled workers and for ensuring that it is on the radar screen as a destination, although recent public communication efforts and outreach are a positive step. For other categories of workers, Germany’s well-developed models for bilateral agreements could face novel constraints if they are to involve origin countries outside Europe, where much of future recruitment will have to occur.”

The review of Germany’s labour migration policy is the second of a series conducted by the OECD Secretariat as a follow-up to the 2009 High Level Policy Forum on International Migration. Prior to the 2008-09 economic crisis many countries had made substantial changes to labour migration policies with a view to facilitating recruitment from abroad. With the introduction of these changes, more prominence was accorded to the question of their effectiveness and more broadly, to the objectives of labour migration policy in general. Although the economic crisis put a damper on labour migration movements, it did not stop them entirely, and interest in labour migration policy is unlikely to diminish in the near future.

The report addresses the question of whether labour migration policy is effective in meeting labour market needs without adverse effects, and whether the policy is efficient. It analyses two key areas: i) the labour migration system and its characteristics, in terms of both policies in place and the labour migrants who arrive; and ii) the extent to which it is responding to the current and forecast needs of the domestic labour market, as well as any impact on the latter.

Read the full report here.