Lost economic output: Labor shortage costs Germany 80 billion euros

Lost economic output: Labor shortage costs Germany 80 billion euros

lost economic output
Labor shortages cost Germany 80 billion euros

Almost two million vacancies were reported in Germany in the second quarter alone. There is a lack of skilled labor. The deficit also affects Germany’s economic performance, a study finds.

According to calculations by the management consultancy BCG, a labor shortage costs Germany $84 billion (86 billion euros) annually in lost economic output. According to the authors, losses in the German economy are the second highest after the US in a comparison of the economically strongest countries, according to the Boston Consulting Group study.

The authors of the study Johann Harnoss and Janina Kugel have prepared the article in collaboration with the United Nations International Organization for Migration. The calculation for Germany was based on figures from the Nuremberg Institute for Labor Market and Labor Research, which reported 1.9 million job openings for the second quarter.

“That’s about a million above the long-term average,” Harnoss says. “Both economists and we see that as a structural flaw.” Harnoss and former Siemens HR director Kugel estimate that each of these one million missing workers would generate an average of about $84,000 in economic output per year — a total of $84 billion.

Even assuming immigration of 300,000 to 400,000 people per year, the number of people of working age would fall by three million by 2035 and by nine million by 2050, Harnoss and Kugel estimate. “The cost of $84 billion will be even higher if we don’t counter it,” Kugel said. “While the US has the most job openings, it is also best placed to fill the gap.” In the United States, Kugel and Harnoss predict a labor shortage of 19 million by 2050, but also an equal number of immigrants.

“Political discussions in completely different shades”

Harnoss suggests that Germany specifically recruits workers from countries whose populations are still growing. “One possibility would be to train people there in their home country before coming to Germany.” That would have advantages for the immigrants, for the countries of origin and for the countries of destination.” He cited India, Nigeria, Indonesia and Egypt as examples.

“We must have non-ideological lines,” Kugel argued for a factual discussion on immigration. “If we have an even greater shortage of skilled workers, we will have a very different tone of political discussion,” she said, referring to the affordability of pension and health systems. “Where immigration is on a large scale, acceptance is also significantly higher,” argued Kugel, referring to cities like Munich, where a very high percentage of immigrants goes hand in hand with a relatively low influx of extremists.

Kugel and Harnoss advise German small and medium-sized companies to increasingly look to the international labor market – and not just to replace local workers who are leaving. “The more diverse companies are, the more innovative they are,” says Kugel, referring to US tech companies that employ a large number of immigrants.

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