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Germany can create four million new jobs

Frank-Walter Steinmeier, the Social Democratic Party’s chancellor candidate, announced last week a plan to create full employment in Germany by 2020. Rejecting criticism he’s being unrealistic, he argues his political opponents offer no alternative.

Germany can create four million new jobs
Photo: DPA

We were making progress – in September 2008, unemployment numbers were down by nearly two million when compared to the record high back in 2005. But the crisis has set us back – 3.4 million people are unemployed in Germany. They’re looking for a job. They’re looking for affirmation and recognition from their efforts. They want to be responsible for their own life with a job and an income. Work offers dignity. They don’t want to have to rely on government handouts. Unemployment takes away the qualifications workers have earned. Unemployment demoralizes. Unemployment destroys families.

But we can’t give in to unemployment. We have to fight it – using the right policies, with the right public stimulus and by using our combined strength. Smart crisis management is vital. But we also have to escape all the rhetoric. We have to take a fresh perspective and look forward.

A week ago I presented my “Plan for Germany” – with an ambitious goal: full-employment by 2020. Since then, our country has been discussing my proposal and the jobs of the future. Where will the new jobs come from in the next decade? That is the key question for our society’s future and the fact that the wall of silence is broken is an early victory.

As expected, the reaction was mixed. Many are intrigued and some are even impressed. But others are more reserved and critical. They agree with my goals but doubt whether my ideas for new jobs – with a focus on resource-conserving, energy-saving technologies as well as new materials, products and processes, and specialisation in product-related services – are realistic.

The political opposition refuses to join the battle against unemployment. They have no concepts, no answers. Last week I was on a tour of Germany to see for myself how we can create four million new jobs. The Ruhr Valley is a good example. No other city has had to remake itself as radically as Dortmund. Some 70,000 new jobs in 10 years – that’s the goal. There are already 38,000 new jobs. Dortmund hasn’t yet crossed the finish line but it’s going in the right direction. And what’s true for Dortmund is true for Germany.

When I talk about four million new jobs, it isn’t an empty promise. I don’t think the government can create these new jobs. But we can reach four million new jobs by 2020 if we create the right conditions. So I took a hard look at where, in the next decade, markets for new products and services will arise and what kind of shape German companies are in as they approach the starting line.

Germany is already ahead when it comes to green technologies. In the next decade, companies around the world will try to use energy and raw materials more efficiently – because the global population is growing and because the climate is already changing. And because it saves money. This is creating demand for a whole raft of new, energy-saving technologies for transportation, buildings and households as well as industrial production and environmentally-friendly energy generation. By 2020, the global market for green technologies will double. This could mean two million new jobs for Germany. Studies back this up.

A strong production base in Germany is also good for the services sector. Two industries affect the development of services in particular: health care and the creative sector. Everyone knows Germany is getting older. And the number of care personnel already lags demand. Person-to-person services will grow. And the companies in the pharmaceutical, biological and medical equipment sectors are already preparing for a shift towards greyer demographics. Growth markets aren’t just at home – and German companies lead abroad. There are also new treatment models, health care IT and health care software. Studies from the Institute for Work and Technology as well as nearly all major consultancies show that at least one million new jobs could be created in health care by 2020. This isn’t a dream – in the last 15 years, one million new jobs have been created here.

Four million new jobs by 2020 – by exploiting the growth opportunities explained here, it’s realistic. A look back also confirms this – given the right conditions, strong job growth is possible within just a few years. In the boom years of 2005 to 2008, 1.6 million new jobs were created in Germany; unemployment fell by a third to 3.3 million.

But how can politicians clear the way for the jobs of the future? The most important thing is ensuring a good education for everyone. That is the forerunner of not only a fair social policy but also a successful economy. Without a massive education push that includes new approaches for schools in difficult neighbourhoods we face a predicament – high unemployment on the one hand and a lack of qualified employees on the other.

By the middle of the next decade, we will be short one million university graduates and up to 500,000 highly qualified workers. But more and better education costs money. We have to significantly increase our investments in education in the coming years. To finance this, top earners should make a contribution to show their solidarity. This will increase the quality of education and training in our country.

While travelling through Germany, I met people who work in companies, research institutes and associations that are striving to create the jobs of tomorrow. In Jena, in Ulm, in Braunschweig and in Chemnitz. Or even in Dortmund – it doesn’t matter where, it’s possible anywhere. Because these individuals don’t back down. They’re inspired by their ideas. They prove to me that we can achieve ambitious goals in Germany. That full employment is possible. We can’t give up on that goal – especially not now!

Frank-Walter Steinmeier is Germany’s foreign minister and the Social Democratic Party’s candidate to become chancellor in this September’s general election. Translation by The Local.

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WORKING IN GERMANY

Five things to know about salaries in Germany

Finding a job is typically a top priority when planning a move to Germany. The country boasts the third largest economy in the world and a continuing need for skilled professionals. 

Five things to know about salaries in Germany

If you are moving to Germany, you might soon start looking for a job in the country. However, like many other aspects of living abroad, there are several cultural differences and specificities when it comes to job hunting in Germany – especially when it comes to salaries.

Here are five things to know about salaries in Germany.

There is a minimum wage in Germany

Germany’s minimum wage of €12.41 per hour, pre-tax came into effect at the start of this year. This amounts to a monthly salary of €2,054 which ranks ninth in the world. The minimum wage will rise again in 2025 to €12.82 per hour before tax deductions.

There have been calls recently to hike the salary up higher to €14 per hour.

READ ALSO: Millions of workers in Germany ‘earning less than €14 per hour’

Find out salary expectations

Germany does not require companies to list salary ranges for listed positions. But that may be changing soon. The EU parliament passed a wage transparency law to require companies to publish annual reports detailing wage and wage discrepancy information. The rules, which are set to go into effect in 2027, are intended to help close the gender pay gap. 

In the meantime, employees can utilise online resources to find industry averages and expectations for different roles:

  • Gehalt.de offers users access to salary information on more than 800 professions
  • Online platform, Kununu provides compensation information and employer reviews to users in the DACH region  
  • Berlin residents can utilise REDSOFA’s salary survey for an overview of salary averages in the country’s capital city

As of April 2023 the average gross monthly salary was €4,323 according to Germany’s Federal Statistical Office.

Two-thirds of full time workers make less than this average monthly salary and one-third of workers earn more than this average monthly salary.

While wages after deductions may be less than similar roles in other countries, it is also important to take into consideration what other benefits come with a salary. Paid holiday leave, pension contributions, long notice periods and annual bonuses can help make up some of that difference. 

READ ALSO: How much do employees in Germany typically earn?

Check your payment schedule

Internationals can usually expect their salary once a month when working in Germany. Many German companies choose to pay employees either on the 1st or 15th of the month. It is also important to note that most employees can expect to receive their first pay check within 30 or 45 days of starting. 

For positions that offer yearly bonuses, these payments are included in a 13th pay check which are subject to income tax.  

A person works on a laptop.

A person works on a laptop. Image by Bartek Zakrzewski from Pixabay

How many hours do you work?

When looking for a job, don’t forget to check how many hours you can expect. Job descriptions will include expectations for time commitments. 

Mini-jobs, as expected from the name, are limited in hours and pay. Employees can expect up to €538 per month. Mini-jobs do not provide social security because they do not require social security contributions. Employees are also not automatically covered by health and nursing care insurance. 

Teilzeit, or part time jobs, are defined as any job where working hours are less than a full time position.

A common misconception is that part-time work requires working 20 hours or less a week. But an employee working five days a week for 30 hours, at a position that is typically 40 hours when full time can also be defined as a part time worker. 

READ ALSO: The rules in Germany around ‘mini’ and ‘midi jobs’

In fact, Germany has a term for workers who work between 28 and 36 hours a week. Vollzeitnahe Teilzeit, or nearly full time part time workers, can be a popular choice for some people, including parents. These positions can give employees more flexibility to balance work and family responsibilities. It is important to note that these workers are paid according to their time worked, so it will still amount to less than full time.

Depending on the work schedule, part time employees can earn the same amount of vacation as their full-time counterparts. That’s because holiday leave is calculated based on days worked, not hours. If a part time worker comes in five days a week, they will be eligible for at least 20 days of holiday. If that same part time worker comes in three days a week, they will be legally entitled to twelve days of vacation, even if they worked the same hours as the other employee. 

In most companies, weekly working hours between 35 and 40 hours are considered full-time employment or Vollzeitbeschäftigung

Watch out for the gross v. net difference

Before you sign the dotted line, it will be important to check how much of your gross salary you’ll be able to keep come pay day. Companies that include salary expectations in descriptions include gross salary (Bruttoeinkommen) – not the net income after taxes and deductions (Nettoeinkommen). The amount deducted will depend on how much you earn, the tax class you’re in and on other factors such as how much you’re paying for healthcare but it is usually around 40 percent. 

Salaried employees can find information on the deductions on their pay slip. Some to expect to see include:

  • Taxes are deducted directly from the gross pay. The amount is based on the tax bracket your salary falls within 
  • A percentage of your gross salary is also deducted for your pension / retirement contributions
  • Church taxes between eight and nine percent of your salary will also be due if you are affiliated with a religion
  • Unemployment insurance amounts to a 2.5 percent deduction from your gross salary. It is important to note that the insurance covers a salary up to €90,600 
  • Health insurance contribution rates are typically split between employers and employees. The rate depends on the provider. In 2024, the TK contribution rate to health insurance is 15.8 percent of the gross income

READ ALSO: What you need to know about your payslip in Germany 

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