Germany is one of the oldest countries in the world. Demographic change is already clearly evident and will have an even greater impact on the labor market in the coming years — as the so-called baby boomers gradually retire. However, well-qualified skilled workers are a key prerequisite for the innovation and competitiveness of industry in Germany.

A coherent and balanced overall strategy is necessary

What is needed is a coherent, comprehensive strategy to tap into all domestic potential, as well as the immigration of skilled workers and labor from third countries, i.e. countries outside the EU. This is because migration from the EU cannot solve the German economy’s skilled-labor shortage in the long term, as many EU countries are facing similar demographic challenges.

The domestic labor force — including women, older people, the long-term unemployed and people from migrant backgrounds — must be mobilized even more effectively. Further progress in balancing family and career would, above all, enable women to work closer to full-time hours. Early retirement incentives and the aim of keeping older people in work for longer are incompatible.

An effective immigration administration is a prerequisite for successful labor migration

Increased labor migration to Germany and reduced emigration from the country are further building blocks for addressing skills shortages. The legislative changes in recent years are moving in the right direction in many areas and can help alleviate the labor and skilled worker shortages. However, the following remains true: Labor migration to Germany stands or falls with an effective immigration administration. Reforms will only be effective if we succeed in significantly and swiftly improving its practical implementation. Administrative procedures must be noticeably simplified, accelerated, and digitized. Otherwise, even the legal reforms will come to nothing. Germany must also become an attractive destination for foreign skilled workers. A genuine welcome culture is crucial to this end.

Separate from labor-market-oriented immigration, which aims to secure the workforce and skilled labor base of the German economy, is the immigration of refugees. It stems from the constitutionally protected right to asylum and the Geneva Convention on Refugees. As such, it is not a substitute for managed labor migration as a response to the skilled labor needs of German companies. Nevertheless, it is right to integrate those who have the right to remain in Germany into the labor market as quickly as possible.