The Germany's new coalition government has announced that it will open its borders for 400,000 qualified workers from abroad each year to tackle both a demographic imbalance and labour shortages in key sectors. It says the shortages of skilled young labour is undermining the efforts economic recovery from the Covid-19 pandemic.
"The shortage of skilled workers has become so serious by now that it is dramatically slowing down our economy," Christian Duerr, parliamentary leader of the co-governing Free Democrats (FDP), told business magazine WirtschaftsWoche.
"We can only get the problem of an ageing workforce under control with a modern immigration policy... We have to reach the mark of 400,000 skilled workers from abroad as quickly as possible," Duerr added.
The employer-friendly German Economic Institute had estimated that the German labour force will decline by more than 300,000 people this year as there are more older workers retiring than younger ones entering the labour market.
This shortage is expected to widen to more than 650,000 by 2029, which will to about 5 million accumulated shortage of people of working age by 2030. The number of Germans in employment grew to nearly 45 million last year despite the coronavirus pandemic.
Chancellor Olaf Scholz's Social Democrats, Duerr's libertarian FDP and the environmentalist Greens agreed in their coalition deal on measures like a points system for specialists from countries outside the European Union and lifting the national minimum wage to 12 euros ($13.60) per hour to make working in Germany more attractive, Reuters reported.
The labour shortage undoubtedly was caused by years of low birth rates and uneven migration.
The declining labour force also poses a demographic time bomb for Germany's public pension system, in which fewer employees are burdened with the task of financing the pensions of a growing mass of retirees who are enjoying longer life expectancy.