As the Local has been reporting, Germany is currently facing a significant worker shortage.

We spoke to Panu Poutvaara, Professor of Economics at the University of Munich and Director of the Ifo Center for International Institutional Comparisons and Migration Research to find out if Germany’s immigration policies are affecting this and how they could be improved.

The Local: Why is there currently such a shortage of workers in Germany?

Panu Poutvaara: Before the pandemic, the German economy was actually doing very well. After the 2008 financial crisis, in fact, it was one of the best performing European economies which meant that the need for workers increased and this trend has been growing for the last 14 years.

Now, there are more people entering retirement than there are entering the workforce.

Which sectors are seeing worker shortages?

With an ageing population, there is a growing demand for workers in healthcare and in old age care.

But there is also a lack of skilled workers such as tradesmen, plumbers, and electricians. IT specialists are also in high demand globally, which means that there is a lot of international competition, particularly from the US.

Is Germany an attractive place for foreigners to come and work?

Germany certainly has a lot of opportunities to offer and, in terms of the total number of immigrants, Germany has become one of the most popular destinations worldwide.

But there are also significant disadvantages for foreigners moving to Germany.

For IT specialists, for example, the US is a more attractive prospect for many people, especially from countries like India that also have English as an official language. Furthermore, salaries are higher and taxes are lower in the US than in Germany and American companies are the market leaders in these sectors.

Do you think language is a big issue then, in terms of putting people off coming to Germany?

Yes, and I think Germany needs to be more flexible with its language requirements. In fact, I expect the current government to propose acknowledging English skills in the immigration process, in addition to German skills.

The Netherlands, for example, have an advantage over Germany in that is much easier to live there without speaking the local language and most services are available also in English.

READ ALSO: ‘Appointments in English’: How Germany wants to attract talent from abroad

In my opinion, it would be good to have more jobs in English too, as far as possible. This would mean that employers should think about whether German is really necessary to be able to do the jobs they’re recruiting for.

What other things do you think Germany could do to encourage immigration?

One thing would be to improve the immigration process. I know that a lot of people currently face very long waiting times at the German embassies, and this presents an unnecessary hurdle that could quite easily be alleviated.

Another thing that Germany could do, would be to broaden the offer of German language learning in foreign countries.

For professions like healthcare, it’s imperative that workers speak German so that they can communicate with their patients. Therefore, it would be good to offer young internationals the chance to learn German in their home countries.

The Goethe institute around the world has the potential to improve such offers, to strengthen partnerships with countries like India and offer students German language learning programmes.

READ ALSO: Germany looks to foreign workers to ease ‘dramatic’ worker shortage

What do you think about the new points-based immigration system that the German government recently announced?

I welcome it. It’s an improvement.

The proposals aren’t fully fleshed out yet, and it will be interesting to see how the points system will work exactly in case of excess demand in a given year. Will preference be given to those who get the highest number of points, or is everyone who has the required number of points allowed to come until the quota is reached?

READ ALSO: What you need to know about Germany’s points-based immigration plans

One thing that is good about the proposals is that they also target less qualified people and not just those with a certain type of education.

As part of plans to overhaul immigration laws, Germany is planning to allow non-EU nationals to hold multiple citizenships. Do you think the proposed changes could help attract more skilled workers to the country?

I think it will clearly have some effect, but that it’s not the most important factor.

The problem is that some of the countries from which migrants are coming, such as India, don’t allow dual citizenship themselves.

I think reducing bureaucratic hurdles and speeding up the process of giving visas to people who want to come to Germany from non-EU countries, will have a bigger impact than offering dual citizenship.

Are there any other factors that could help alleviate the worker shortage?

Another thing to mention is that Germany still has a challenge when it comes to integrating people who are already in the country.

Unemployment rates are higher among refugees and Germany should definitely try to improve labour force participation in this section of society. 

READ ALSO: ‘Happy to work here’: How refugees in Germany are easing labour shortage

I welcome government plans to give people who initially came to Germany as asylum seekers before January 1st, 2017 and who have been given only temporary permission to stay, an opportunity to obtain permanent permission to stay, provided that they find a job and learn German.