Germany is facing a looming labor shortage as immigration from Eastern Europe, a traditionally strong source of workers, has drastically declined. This significant drop, amounting to 138,000 fewer immigrants annually compared to peak periods, has prompted the German government to explore new recruitment strategies.
Historically, immigrants from the countries that joined the EU’s eastern expansion played a crucial role in mitigating demographic shifts and securing skilled labor in Germany. However, the German Economic Institute (IW) reports a staggering 66.5 percent decline in annual immigration from these regions.
During peak years (2011-2015), Germany welcomed an average of 207,000 people annually from all EU eastern countries. This number has now fallen to just 69,000 per year, according to German newspaper Welt.
At the same time, migration from countries from the Middle East, Africa, and India, have soared higher. Migrants from the Middle East and Africa, in particular, feature low labor participation rates and when employed, are often in lower-skilled positions.
According to IW economist Alexander Burstedde, there is no relief in sight in terms of the slowdown in Eastern European migrants, as the “potential population willing to migrate has already been significantly exhausted in these countries.”
Impact on the German labor market
The Institute for Employment Research (IAB) highlights the critical importance of foreign workers in filling the labor market gaps left by Germany’s aging population. Between 2015 and 2024, skilled employment in Germany increased by 600,000, while the number of German employees decreased. The rise in unskilled jobs, exceeding 1 million, is also almost entirely attributable to foreign workers.
The Federal Statistical Office indicates that foreign workers now constitute over 18 percent of the total workforce in Germany, a proportion that is clearly rising. However, immigration from Eastern and Southern Europe is growing only marginally.
Shifting migration patterns
IW economist Burstedde’s analysis of migration flows from Eastern and Southern Europe, including EU eastern enlargement countries (EU-8, Bulgaria, Romania, Croatia) and the Western Balkans, between 1999 and 2023 reveals a dramatic shift.
The EU-8 states, which include Estonia, Latvia, Lithuania, Poland, Slovakia, Slovenia, Czech Republic, and Hungary, and most importantly, Poland, were once major sources of immigrants for Germany.
However, by 2023, only around 17,000 people annually came from the EU-8 states, an 84 percent drop from peak times. Similarly, immigration from Bulgaria and Romania fell by 53 percent to 47,000 people, and from Croatia by 82 percent to just 5,000 people annually.
Burstedde notes that the initial high levels of immigration post-EU enlargement were not sustainable and that “skilled workers from the countries of the EU’s eastern expansion are unlikely to make as significant a contribution to securing skilled workers in the future as they have in the past.”
Many of the EU’s eastern countries that came to Germany had professional qualifications, amounting to two-thirds of immigrants, while 75 percent of Germans have such qualifications.
Eastern Europe lost out
This flow of migrants, however, presented problems for the countries they were leaving. Nations like Hungary, Czechia, and Poland, for instance, saw some of their youngest and smartest citizens leave for nations like Germany and many others, amounting to a brain and labor drain. It has also greatly exacerbated the demographic situation in many of these eastern countries, where population decline has greatly accelerated in recent years.
However, many young people in these nations are now increasingly deciding to stay home. For one, wages still remain below Western European standards, but they have rapidly caught up. In addition, the standard of living in a country like Poland not only has greatly improved, but in many instances, it exceeds what nations like Great Britain, a top destination for Poles, had to offer.
Poland and other Eastern European countries also remain homogenous countries with vastly lower crime rates than many Western European countries. For many of these Europeans, it does not make sense to pack up and leave anymore.
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