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EMPLOYMENT

Switch to e-cars will cost Germany 75,000 jobs, study finds

The growing use of electrified vehicles is expected to cost Germany's crucial car sector some 75,000 jobs by 2030, a study found Tuesday, with smaller auto parts suppliers set to be worst hit.

Switch to e-cars will cost Germany 75,000 jobs, study finds
The production of e-cars at a BMW plant in Leipzig. Photo: DPA.

The IG Metall union, which commissioned the study along with BMW, Volkswagen, Daimler and a string of car parts makers, said the pivot towards cleaner engines posed a “major challenge” to Germany's biggest industry, which employs more than 800,000 people.

Electric engines are simpler to build and require far fewer parts than petrol- or diesel-fuelled cars.

According to the study, carried out by the Fraunhofer Institute, the shift will eliminate 100,000 of the 210,000 jobs in drivetrain manufacturing by 2030, while around 25,000 new roles will be created linked to batteries and other specific requirements for electric cars.

The figures were calculated on the assumption that by then, 25 percent of all cars on Germany's roads will be fully electric, while another 15 percent will be hybrids, which combine an electric motor with a traditional internal combustion engine.

Today, these cars account for less than two percent of the market.

SEE ALSO: German automakers are biggest global spenders on electric cars: study

IG Metall chief Jörg Hofmann said the government and company bosses needed to take urgent action to prepare the industry for the upheaval, including through retraining schemes.

But he also warned that not everyone would survive the electric revolution.

“There will be suppliers who won't be able to adapt their business model, especially among small- and medium-sized companies,” Hofmann told reporters in Frankfurt.

Whereas it takes some 4,000 workers to assemble a million gasoline-powered engines per year, just 1,840 are needed to build the same number of electric motors, the study said.

Volkswagen's staff representative Bernd Osterloh told reporters that the car giant would respond to the changes by phasing out jobs through retirement schemes and “using the opportunities presented by the transformation”.

Despite being home to some of the world's biggest and best known carmakers, Germany's auto industry was slow to focus its attention on the greener, smarter vehicles of the future — allowing newcomers like Tesla to take the lead.

But German firms have stepped up their efforts in the wake of Volkswagen's 2015 “dieselgate” emissions cheating scandal, which badly damaged the reputation of diesel cars and spurred a push towards more environmentally friendly engines.

READ ALSO: German auto companies 'at forefront' on key electric car technology

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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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