Foreign workers - Essential for the German labour market

A recent study by the Bertelsmann Foundation (Bertelsmann Stiftung) shows that the German labour market is dependent on migration and foreign workers.

The immigration of foreign nationals is at the centre of the political debate ahead of the German parliament (Bundestag) elections on 23 February 2025. Most recently, at the end of January, the CDU/CSU party attempted to get its Immigration Restriction Act affirmed by the Bundestag and was supported by the German right-wing party AfD for the first time. Among other things, the bill envisaged turning back asylum seekers at Germany's borders and banning family reunification for those entitled to subsidiary protection. The Bundestag rejected the bill in the third reading after a lengthy discussion.

By attempting to regulate migration in Germany more strictly, the CDU/CSU - along with other parties - is responding to the growing scepticism of many citizens regarding the negative effects of migration not only on public safety, but also on the German economy and labour market.

However, a recent study by the Bertelsmann Stiftung makes it clear that this scepticism is unjustified. It proves that the German labour market is dependent on immigration. The key message of the study: without immigration of foreign nationals, the number of workers and employees in Germany will fall by 10 per cent by 2040. The immigration of international labour, especially from third countries, is therefore of key importance. 

Kubis/Schneider Immigration and the labour market - An analysis for Germany and the federal states, Bertelsmann Stiftung.

German labour market needs 

The Bertelsmann study "Immigration and the labour market" published on 25 November 2024 shows that despite the high level of immigration in recent years, Germany is still dependent on migration to ensure that the labour market does not become unstable and that the labour force potential can be maintained. (Kubis/Schneider Immigration and the labour market - An analysis for Germany and the federal states, Bertelsmann Stiftung, p. 4.) The labour force potential describes the supply of workers in Germany. Without migration, such supply would fall by 10 per cent by 2040 and by as much as 25 per cent by 2060. The eastern federal states are particularly affected, especially Saxony-Anhalt and Thuringia. In principle, however, all federal states without exception will be affected by a significant decline in the workers supply by both 2040 and 2060. 

In order to cover the demand for labour, an annual net immigration of around 290,000 people would be required by 2040. This includes the number of immigrants subtracted by the number of emigrants. A declining labour force potential could lead to economic stagnation in Germany. 

Statistics from the Federal Employment Agency also support the results of the study. In 2023, significantly more people applied for asylum than in the previous year. In the same year of 2023, foreign nationals were solely responsible for employment growth in Germany and thus compensated for the decline in employment of German nationals. (Statistics of the Federal Employment Agency, Reports: Arbeitsmarkt kompakt – Ausländische Arbeitskräfte am deutschen Arbeitsmarkt, Nuremberg, February 2024.)

Study reflects the reality of many employers

The study by the Bertelsmann Stiftung predicts scenarios that many employers, particularly in the care, catering and IT sectors, are already feeling the effects of. In this context, more and more voices in business are emphasising the indispensability of foreign (skilled) workers. For example, the President of the German Engineering Federation (VDMA), Bertram Kawlath, pleaded that in order to keep our companies running, we need more labour from abroad. Above all, companies and employers are calling for simpler and more efficient recruitment methods, easier recognition of foreign qualifications and the removal of bureaucratic obstacles.

These demands stand in contrast to the current political debate and the stricter regulation of migration policy. The current political discussions may even have a negative impact on the recruitment process for foreign labour and have a deterrent effect on foreign workers.

Support and funding programmes for employers

Immigration of foreign nationals is essential for the German economy and for maintaining market prosperity. However, this requires not only that migration as such takes place by creating the legal framework for it. Rather, migration can only succeed if immigrants are successfully integrated into the labour market and society. In order to achieve such integration into the German labour market, a large number of public funding programmes and advisory services are available for companies and employers, but these have so far been underutilised. 

One of these programmes is the "Job Turbo for the Labour Market Integration of Refugees" provided by the Federal Ministry of Labour and Social Affairs. This funding programme is primarily aimed at employers and offers opportunities to use migration as a chance for themselves. In this way, companies can receive support for various further training, qualification and language support measures. This also includes, for example, the granting of an integration subsidy.

The "Integration through Qualification (IQ)" funding programme of the Federal Ministry for Migration and Refugees aims to improve the labour market integration of people with a migration background. It offers counselling and qualification programmes for employers and employees

The "Make it in Germany" initiative launched by the German Government also offers comprehensive information and support for international skilled workers who would like to work in Germany and for employers who are interested in hiring them. 

In this context, employers can also contact the Employer Service of the Federal Employment Agency for support services, which offers advice on recruiting labour and skilled workers from abroad. In addition to this advisory service, the Federal Employment Agency offers various support measures, including financial incentives for the recruitment of foreign skilled workers and support with the recognition of foreign professional qualifications.

Employers' associations are also much involved in dealing with labour migration and integration and can support employers.