Loss of economic production: labor shortages cost Germany 80 billion euros

loss of economic production
The labor shortage costs Germany 80 billion euros

Almost two million job vacancies in Germany were reported in the second quarter alone. There is a lack of skilled labor. The shortage also has implications for Germany’s economic performance, as calculated by a study.

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

Study authors Johann Harnoss and Janina Kugel prepared the paper in collaboration with the United Nations International Organization for Migration. The calculation for Germany was based on data from the Nuremberg Institute for Labor Market and Employment Research, which reported 1.9 million job vacancies for the second quarter.

“This is about a million above the long-term average,” Harnoss said. “Both economists who see it as a structural deficiency.” Harnoss and former Siemens HR director Kugel assume that on average each of these one million missing employees would generate about $ 84,000 in economic output per year, totaling $ 84 billion.

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

“Political discussions in completely different tones”

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

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

Kugel and Harnoss advise German small and medium-sized enterprises to look more and more to the international job market, and not just to replace local workers who are leaving. “The more diverse the companies, the more innovative they are,” Kugel said, referring to US technology companies that employ large numbers of immigrants.

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