Labour shortage will hit Germany's east hardest as population ages
Of Germany's 16 federal states, only Hamburg and Berlin will see an increase in the working age population by 2040, a study suggests, with the eastern part of the country set to experience the greatest decline.
According to a report published by the Nuremberg Institute for Employment Research (IAB) on Wednesday, the effects of demographic change on the German labour market will be felt most in the eastern German states and the south-western Saarland.
The working age population in the eastern German state of Thuringia is expected to fall the most, by 15.8%, by 2040.
The IAB predicts that the number of economically active people in Germany will fall from 47.1 million in 2023 to 46 million by 2040, with a total of 910,000 fewer jobs.
IAB expert Enzo Weber explains that this development will vary from region to region. While most jobs will be created in Berlin, Hamburg and Hesse by 2040, few or no jobs will emerge in the eastern German territorial states (excluding Berlin), he said. Proportionally, most jobs will be lost due to structural change and a shrinking workforce, he added.
However, due to the ageing population, around 600,000 new positions are expected to arise in health care and social services nationwide by 2024. Conversely, fewer workers will be needed in industry, the civil service, wholesale and retail and the construction industry.
Weber stated that if Germany wants to maintain its economic strength, efforts must be made in the declining regions. Otherwise, he warned there is a risk of triggering a downward spiral. When fewer people live in an area, public infrastructure is cut back, which can lead to even more people moving away, he said.
Weber sees potential in older people and women who could work longer or more hours. Technological solutions like working from home could also help, allowing people in regions with few job opportunities to work in areas that need workers without having to move.
However, Weber emphasized that immigration of foreign workers is essential: "They often work below their potential in Germany." He therefore stressed the need to improve the recognition of qualifications, to offer more language support and further professional training.
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