Tightening German Labour Market

In the FT today:


The tightness of Germany’s employment market has been highlighted in a report from the Federal Labour Agency showing a sharp rise in job vacancies.

Vacancies rose to a seasonally adjusted 737,000 in June, more than twice the average number for 2004, when the agency began recording the data.

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Actual vacancies are even higher since the agency only records about 60 per cent of the total figure. Officials said the average time required to fill vacancies was also rising and had now reached more than two months, against 50 days on average last year.

Unemployment in Germany, although still relatively high by western standards at 6.6 per cent, has plunged by almost 1m in the past year as the eurozone’s biggest economy has expanded relatively strongly. Many German companies – particularly in engineering, manufacturing and financial services – are now reporting workforce shortages, which economists fear may eventually result in wage increases, possibly fuelling inflation.

The current shortage of workers and Germany’s rapid demographic decline compared with other European economies have sparked a political debate about whether and how to encourage the immigration of highly qualified foreign professionals.

And this from the Independent:

For a nation that invented the term "guest worker" for its immigrant labourers, Germany is facing the sobering fact that record numbers of its own often highly-qualified citizens are fleeing the country to work abroad in the biggest mass exodus for 60 years.

Figures released by Germany's Federal Statistics Office showed that the number of Germans emigrating rose to 155,290 last year - the highest number since the country's reunification in 1990 - which equalled levels last experienced in the 1940s during the chaotic aftermath of the Second World War.

The statistics, which also revealed that the number of immigrants had declined steadily since 2001, were a stark reminder of the extent of the German economy's decline from the heady 1960s when thousands of mainly Turkish workers flocked to find work in the country.

Leading economists and employers say the trend is alarming. They note that many among Germany's new breed of home-grown "guest workers" are highly-educated management consultants, doctors, dentists, scientists and lawyers.

OECD figures show that Germany is near the top of a league of industrial nations experiencing a brain drain which for the first time since the 1950s now exceeds the number of immigrants.

Stephanie Wahl, of the Institute for Economics, based in Bonn, said that those who are leaving Germany are mostly highly motivated and well educated. "Those coming in are mostly poor, untrained and hardly educated," she added.

Fed up with comparatively poor job prospects at home - where unemployment is as high as 17 per cent in some regions - as well as high taxes and bureaucracy, thousands of Germans have upped sticks for Austria and Switzerland, or emigrated to the United States.