Industry’s hearty refugee welcome begins to crack

German industry was initially eager to welcome the hundreds of thousands of refugees arriving into the country - but sceptical voices are being raised about the potential costs of the huge influx to Europe's biggest economy.

Industry's hearty refugee welcome begins to crack
Will refugees contribute to German economic success? Photo: DPA

The head of Germany's construction industry association, Michael Knipper, is making waves with a letter addressed to the powerful BDI industry federation in which he accuses it of propagating a “one-sided” view of the issue.

BDI's “emphasis is too much on the opportunities, and too little on the risks related to the huge, unchecked immigration,” Knipper wrote.

“I cannot share the undifferentiated euphoria about the influx of refugees that is being expressed in large parts of the German economy and industry,” the letter said.

“It would be illusory to believe that we will be able to find jobs quickly for all those refugees currently arriving in Germany.”

And he said it was naive to suggest, as Economy Minister Sigmar Gabriel and a chorus of economic experts have done, that the influx could constitute “a small economic stimulus package”.

Under the official scenario, billions of euros will be spent on taking in the refugees, housing them and integrating them into the labour market – but the additional demand they generate would more than make up for the investment.


The construction sector, in particular, should stand to benefit the most, the argument goes.

“But it's precisely because of this point that we're in a good position” to be a warning voice, an industry federation spokesman told AFP.

The federation is concerned about the long-term effects of the influx.

Public money spent on the refugees will mean less cash to fund education and infrastructure, where the construction industry and the overall economy would benefit in the long run, the federation argues.

German industry has so far always insisted the arrival of a million refugees or more would be positive, given the country's rapidly ageing population and the ever-growing shortage of qualified labour.

So the critical industry voices in the debate are new.

But enthusiasm among the general population is also beginning to wane as the numbers of newcomers surge.

Even though economists continue to predict positive effects for the labour market in the long-term, some experts agree that the number of refugees could actually push the official jobless figures in Europe's powerhouse economy higher in the short-term.

Many of the new arrivals do not speak German and their qualifications do not necessarily match the needs of the market, where engineers and IT specialists are particularly in demand.

Can Germany cope?

While BDI chief Ulrich Grillo insisted only last month that the majority of Syrian refugees were highly qualified, “the Syrian doctor isn't the norm,” conceded Labour Minister Andrea Nahles.

“The majority of Syrians arriving have little chance of getting a foothold in the labour market in the short or medium term,” said Carsten Linnemann, who heads a group of small and medium-sized companies within the conservative CDU

He estimates that “only one in 10 refugees could be placed on the labour market.”

The Munich-based think tank Ifo also believes that the ability of the German labour market to absorb the refugees is limited.

But its president Hans-Werner Sinn likes to style himself as an economic doomsayer and the institute's predictions are viewed with increasing irritation in Berlin, where industry associations prefer to rally behind Angela Merkel's call of “we can cope”.

Defying all such doubts, some German companies are rolling up their sleeves and hiring refugees on the spot.

Carmaker Daimler, for example, announced last week that it had hired 40 refugees as apprentices in collaboration with the local federal labour office.

For members


What Germany’s plans for a points-based system mean for foreigners

To tackle its ever-widening skills gap, Germany wants to encourage talent from aboard to move to the country by introducing a points-based immigration system. Here's what foreigners need to know about the changes.

What Germany's plans for a points-based system mean for foreigners

What’s a points-based system?

A points-based system is an immigration model where foreigners have to score above a certain threshold of points in order to obtain a residence or work permit in a country. The exact scoring system is set by the government, but can include factors like language skills, family connections to the country, specific qualifications or work-related skills, or the amount of money in your bank account. 

Points-based systems can also be known as “merit-based systems”, because there tends to be a pretty big emphasis on what you can offer a country in terms of education or skills. 

The model was first introduced in Canada way back in 1967 as the country tried to move past a system based on race and nationality to one that favoured language fluency, youth and educational or vocational background. A similar step was taken in Australia just a few years later in 1972 and, since Brexit, the UK has also introduced its own points-based model. 

How does this relate to Germany?

When the new ‘traffic-light’ coalition of the Social Democrats (SPD), Greens and Free Democrats (FDP) took office last December, the parties pledged to reform Germany’s immigration system and bring a fresh cohort of workers into the country.

“In addition to the existing immigration law, we will establish a second pillar with the introduction of an opportunity card based on a points system to enable workers to gain controlled access to the German labour market in order to find a job,” the coalition agreement read.

This would apply to third-country nationals who don’t otherwise have the right to live and work in the country. 

READ ALSO: EXPLAINED: What Germany’s new government means for citizenship and naturalisation

German language course poster

A sign advertising German courses. Language skills can count towards points in a points-based system. Photo: picture alliance / dpa | Bernd Wüstneck

FDP migration specialist Dr. Ann-Veruschka Jurisch, who is working on these reforms, says the policy is driven by Germany’s desperate need for workers. 

“The Liberal Party (FDP) is convinced that we need more labour migration,” she told The Local. “We do have a lot of options for coming into Germany as a labour migrant – but it’s a bit complicated – and if you want to come to Germany to search for a job and you don’t come from an EU country, it’s much more difficult.”

That’s why the coalition is aiming to offer a second route for people who don’t have job lined up in Germany, but who otherwise have the skills or talent to find one. 

What will this look like?

The plans for the points-based system are still at an early stage, so the exact criteria haven’t been worked out yet.

What’s clear at this stage, however, is that the points-based option would run parallel to the current model, which generally permits people with a concrete job offer in a skilled profession to come and work in the country. 

“It’s about (people having) a good opportunity to come to Germany when they have either a job offer in sight or a direct job offer,” Chancellor Olaf Scholz (SPD) said in response to parliamentary question in January. 

“Next to that, we want to achieve a further possibility for talent – for qualified men and women whose skills we need in Germany, who still don’t have a work contract but, if given access, could use that opportunity. That’s what we’re talking about with this Canadian points-based system. It shouldn’t replace our current system, but rather improve it.”

In short, that means that people with a job lined up won’t be disadvantaged – but there will be alternative routes for those without them. It also won’t affect the EU blue card scheme

READ ALSO: ‘I finally feel at home’: How Germany’s planned changes to citizenship laws affect foreigners

Will people need formal qualifications? 

Probably not – though it will obviously depend on the sector someone works in and their level of experience in their chosen field.

“I personally am convinced that you shouldn’t place too much emphasis on formal qualifications, because it’s very complicated getting your formal qualifications recognised in Germany,” said Jurisch.

“A medical doctor, for example, is one where you can’t say, ‘Okay, you’ve got some experience so we don’t need to see your papers.’ But there are a lot of other jobs which do not have this restriction and they are not formalised but rather based on practical experience.”

Carpenter wood

A carpenter sands down a block of wood in Cologne. Photo: picture alliance/dpa | Federico Gambarini

The issue of recognising qualifications is also a problem that the traffic-light coalition has set their sights on solving during their time in office.

At the moment, the process of getting qualifications officially recognised in Germany is done on a state-by-state basis, so somebody who gets their degree recognised in Brandenburg may have to redo the entire process again in Bavaria, for instance.

According to Jurisch, there have already been conversations between the Ministry for Labour and Social Affairs and the Ministry of Education on the issue, and Labour Minister Hubertus Heil (SPD) has also promised to take steps to solve it.

But, she said, it’s complicated: “I’ve started to dive into this issue, and the more I dive into it, the more complicated it becomes – so there are no silver bullets.” 

How many workers are needed – and where? 

In order to plug its labour shortages, Germany needs around 400,000 new workers every year, according to the Federal Employment Agency. In 2020, Germany’s net migration was just 200,000 and 150,000 people of working age entered retirement – which means the country is currently falling well short of its targets. 

“We have shortages everywhere,” Jurisch said. “We need 400,000 new workers every year, and these people won’t be born in Germany – or if they are, they won’t grow up for another 20 years.

“We haven’t managed to get more women into the labour market, or they work part time, so I don’t think this will make a big difference, and I don’t think we will close the gap by training people.”

In this sense, it seems that immigration is the only option for filling major staff shortages in almost every profession. 

“Whoever I talk to, be it nurses, nannies, IT workers, industrial workers, teachers, lawyers – everywhere we have a shortage,” Jurisch said.

staff shortages Germany

A sign outside a restaurant informs customers of a closure due to staff shortages. Photo: picture alliance/dpa | Stefan Sauer

When will the points-based system be introduced?

Unlike with the plans to reform citizenship, which the SDP-led Interior Ministry wants to achieve by the end of the year, there’s no firm timeline in place for the points-based system.

However, the FDP is fighting for the policy to be given higher priority and would like to introduce the new visa system before the next federal election in 2025. 

“I hope it will be done in this legislative period,” said Jurisch. “I’m pushing to get it a little bit higher up on the agenda.” 

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