German Rebound Fuels Labor Shortage Fears

Feb. 2, 2011
The country has recovered from its worst post-war recession to post 3.6% growth in 2010 and could expand further with more skilled labor.

Germany's astounding economic rebound could cause labor shortages in key sectors, spawning immigration debates as Europe's biggest economy grapples with the consequences of an ageing population. "This is something the entire society will have to come to terms with," said Martin Leutz, spokesman for the German employers federation Gesamtmetall.

On Feb. 1, the latest seasonally adjusted reading of German unemployment showed a decline to 7.4% of the workforce, the lowest rate since Germany's reunification in October 1990, ING senior economist Carsten Brzeski said.

Germany's economy is tipped to expand by 2.3% this year, but Economy Minister Rainer Bruederle has also warned that "a lack of qualified workers risks prompting a slowdown in prosperity and growth."

In Heuchelheim, western Germany, the Schunk Group is an expert in carbon technology and ceramics and makes specialized materials used to produce solar panels. It is also active in metal processing and climate technologies, and Schunk products and processes are found in vacuum cleaners, cars, high-speed trains, wind turbines, rocket engine coatings and Mars rovers.

Spotless, sparsely-manned assembly lines are staffed by workers who have had three and a half years of training with abrasive, brittle and expensive carbon materials.

"A specialist technical qualification is necessary to be able to cope with different and complex manufacturing technologies," Schunk personnel director Steffen Friedrich explained.

At some point that could affect the firm's sales, estimated at 840 million euros (US$1.1 billion) last year, "since every vacant post represents a loss of potential turnover," he said.

A study by business consultants Ernst & Young concluded that if German firms had enough skilled labor they would generate an additional 30 billion euros in sales each year.

Germany has staged an amazing recovery from its worst post-war recession to post 3.6% growth in 2010, the best year since German reunification in October 1990.

Alex Nickel of the textile processing firm Lindenfarb Textilveredlung Julius Probst said: "There is something like a Renaissance" of small manufacturing companies that has generated a need for engineers in particular.

Big technology firms call for less stringent immigration laws so foreigners can be brought in, but some conservative politicians say the focus should be on training for jobless German youth.

The debate, dubbed "laptops vs. lederhosen" by the business newspaper Handelsblatt has become a hot topic ahead of the lifting of residual barriers to Eastern European workers in May.

Anja Kettner of the German Institute for Employment Research (IAB) said: "I think some large firms complain so loudly not because they are seriously affected by a shortage but to bring pressure at the political level to ease labor immigration."

Large companies with global networks find it easier to attract engineers and IT experts from Asia than smaller ones that can offer less attractive packages.

But at the German Chamber of Commerce (DIHK), Stefan Hardege, director of its labor market unit said: "Our surveys show that within the next five to 10 years we are expecting problems."

The national statistics office Destatis warned in a 2009 study that the working age population "will be particularly affected by shrinking and ageing."

A survey of DIHK offices abroad meanwhile found Germany scored below average on a measure of how attractive it was to foreign workers and students compared with countries like Australia, Britain and Canada. With good German, five years of study and depending on experience, gross salaries range from around 1,800-2,500 euros ($2,475-$3,300) per month for workers in the sector. In Britain, comparable figures ranged from the equivalent of 1,245-1,615 euros according to hourly wages compiled by the data group Laing and Buisson.

"It's a question of language, it's a question of culture, of integration," Kettner said. Already for German families, many women that want to rejoin the workforce are held back by a lack of child-care facilities. Around Munich in southern Germany, "it is almost impossible to get qualified people" for nursery schools, explained Beate Donislreiter, who runs four facilities for Diakonie Hasenbergl, a Protestant church foundation. A German law will oblige local governments to provide child care for more than one third of youngsters aged 0-3 by September 13."We're talking about more than 50,000 extra nursery staff," noted Anette Skau Fischer of Wehrmann & Comites Consulting.

Copyright Agence France-Presse, 2011

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