Skilled Worker Shortage in Germany

From the Financial Times:

Germany looks east to fill skills shortage

By Hugh Williamson in Berlin

Published: July 25 2007 18:30 | Last updated: July 25 2007 18:30

Berlin is considering lifting some restrictions on workers from eastern Europe taking jobs in Germany, in the latest sign that the upturn in Europe’s largest economy is causing a skills shortage.

Germany’s ban on workers from new European Union member states, imposed at the time of EU enlargement in May 2004, may be eased next year, a labour ministry spokeswoman said on Wednesday. The move would be part of a “package of labour market measures” aimed at tackling shortages of qualified workers such as engineers, technicians and IT specialists, she added.

Chancellor Angela Merkel’s ruling coalition is to consider the proposal at a meeting in late August, the spokeswoman said. Germany and Austria are the only countries among the 15 “old” members of the EU to retain restrictions preventing workers from 2004 accession states in eastern Europe from applying freely for jobs.

Berlin is due to review the ban in two years’ time, but Gerd Andres, the deputy labour minister, said this week that “if the shortage of qualified workers continues, the limits on eastern European workers could be lifted before 2009”.

Germany’s chamber of commerce welcomed the initiative, noting that large companies “urgently need skilled workers from eastern Europe and elsewhere”.

Ute Brüssel, the chamber’s spokeswoman, said: “Unlike Britain, for instance, Germany did itself a disservice by closing itself off to eastern Europe after 2004”. Hundreds of thousands of east European workers have moved to Britain in the past three years.

Workers from Poland, Hungary and the Czech Republic were most likely to move to Germany, experts said. But many workers from these countries have already moved to other EU member states.

The chamber added that “opening to labour migrants from eastern Europe would also help Germany by allowing German workers to take up jobs in Poland and elsewhere”. Some states imposed restrictions on Germany in response to its 2004 ban.

Companies have in recent months complained that despite persistently high unemployment, at 3.7m, vacancies for specialist workers were hard to fill. An engineering sector survey in February by the IW economic think-tank showed that companies could not fill 48,000 vacancies. A business poll last month in Bavaria, one of Germany’s strongest economic regions, showed that 24 per cent of companies had unfilled openings for qualified staff.

Germany imposed the restrictions over fears of wage dumping from eastern Europe, and on Wednesday trade unions, and some Social Democrats within Ms Merkel’s coalition, voiced worries about lifting the limits.

SPD legislators said the opening towards eastern Europe should be linked to the introduction of minimum wages in certain sectors, an issue that has sparked controversy in the coalition. Members of Ms Merkel’s Christian Democrats said that since vacancies were for highly paid workers, the minimum wage issue was irrelevant.

Other related proposals on the agenda at next month’s coalition meeting seeking to boost the supply of qualified labour include schemes for retraining and improved qualifications for German workers, and greater openness to labour migrants from outside the EU.

Under discussion is a points system to attract well-qualified migrants, and a cut in the threshold above which non-EU migrants can take jobs in Germany. The current threshold of an income of €85,000 ($120,000, £57,000) may be lowered to €60,000 to attract more people.