Germany Is Short of Workers, but Its Migrants Are Struggling to Find Jobs

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Germany faces a paradox: After years of record immigration that has seen the equivalent of the population of a large city arrive in the country every year, one in six people in Germany was now born overseas, compared with one in seven in the U.S.

But unlike the U.S., Germany is failing to find work for the newcomers despite a worsening labor shortage that is stifling economic growth. Europe’s largest economy will in addition need to fill about seven million jobs by 2035 as older workers retire, economists estimate.

Experts have long pointed to immigration as the solution, saying Germany needs some 400,000 skilled immigrants each year.

So far, the current mix of immigrants isn’t filling the gap. Official data show that only about a third of the roughly 800,000 working-age Syrians and Afghans in Germany have a taxpaying job, compared with two thirds of Germans, even though most arrived over five years ago. Unemployment among foreigners is about 12%, and under 5% for Germans. In the U.S., foreigners are more likely to have jobs than locals.

The main problem: Many refugees are poorly suited for jobs in Germany’s highly skilled labor market and Germany hasn’t been very good at training them.

To change that, Berlin is planning to introduce a points-based immigration system modeled on Australia’s or Canada’s next year, hoping to woo better-qualified foreigners, but migration experts are skeptical. Even if it succeeds, Germany will likely continue to receive large numbers of asylum seekers it can’t employ, who will fill the ranks of welfare recipients or boost crime statistics, where they are already overrepresented.

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Labor migrants currently only make up one in 10 new arrivals to Germany, compared with one in three to Canada. An earlier European program to draw skilled foreigners, known as the Blue Card, attracted about 70,000 workers to Germany in total over the past decade.

Now refugee numbers are soaring again after a lull during the pandemic, driven by the war in Ukraine and growing emigration from the Middle East, Africa and Afghanistan. In the first half of the year, more than one million people moved to Germany—considerably more than in 2015, when then-Chancellor Angela Merkel welcomed Syrian refugees.

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Meanwhile half of German businesses say they are cutting back their operations or relocating abroad because they can’t find enough workers. Germany’s unemployment rate, at 5.5%, is close to full employment.

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Qualifications are the main problem. Only around one-third of Germany’s Syrian migrants have graduated high school or technical school, compared with 70% of immigrants from Poland, according to the German statistics agency.

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Another problem: The supply of workers from European Union countries such as Poland, who tend to be more qualified than refugees from the Middle East and Africa, has slowed sharply since the start of the pandemic, according to OECD data.

“As long as so many people come here for humanitarian reasons there is not much room for qualified work migration,” said Udo Marin, managing director of the Association of Berlin Merchants and Industrialists, a trade group.