New Hires Foreigners are feeding Germany’s jobs boom

International workers are helping employment to flourish, and businesses want the country’s new immigration law to keep it that way.
Diploma + non-EU + job contract = Blue Card visa.

Germany can thank foreign workers for its flourishing job market. Nearly 33 million employees currently pay into the social security system. That's more than ever before.

In fact, the latest trend shows immigrants make up the majority of the new entrants into Germany's labor market. Some 52 percent of the 750,000 new hires from May 2017 to May 2018 are originally from other countries.

Surprisingly cosmopolitan

One in five new recruits during this one-year period comes from an Eastern European country that belongs to the European Union, like Poland, Romania and Croatia; while seven percent hailed from non-EU countries such as the Balkan region, Russia or Ukraine. Another three percent have Greek, Spanish, Portuguese or Italian citizenship; and nearly 13 percent are immigrants from a country outside of Europe, often Syria or Eritrea, where many asylum seekers are from.

These foreign workers are also important when companies search for trainees. Between April 2017 and April 2018, applications for traineeships from foreigners grew by more than 10 percent, whereas the number of German applicants fell by more than four percent.

Although 90 percent of employees in Germany are German passport holders, the trend is clear: Foreign-born workers are increasingly important to businesses.

Hopes for the new immigration law

The German government wants to pass a new immigration law by year-end. Interior Minister Horst Seehofer has already laid out cornerstones of the law.

His first priority is tightening his grip on immigration — a crucial issue for the conservative bloc he and Chancellor Angela Merkel belong to. Mr. Seehofer proposes a clearer distinction between asylum seekers — people fleeing conflicts or persecution — and economic migrants who came in search of work or better living conditions.

Another guiding principle is giving foreigners who are interested in finding a job in Germany a better chance to look. Furthermore, employers looking for manpower could travel around the world, drumming up interest in their start-up or business.

Many businesses are pleased with Mr. Seehofer's focus on qualified professionals and see the proposals as a step in the right direction. But they still want more clarity. The law must be feasible and successful without bureaucratic hurdles, said Achim Dercks of the German Chamber of Commerce and Industry.

Finding work in Germany

Currently, Germany's so-called 3 + 2 rule guarantees trainees three years to learn a profession and another two years working in their field. This provides some reassurance for a company and the individuals considering starting a program.

But this does not apply to refugees, for example. It is not uncommon for immigration authorities to deport failed asylum seekers after they have already started a traineeship. This is, of course, devastating for asylum seekers trying to settle in but also frustrating for employers who invested time and money. Some businesses want to see rules preventing the repatriation of rejected asylum seekers if they've already found a job or begun training.

For everyone else, the easiest way to enter the German job market is by studying in the country. Graduates from a German university can spend a year and a half looking for a career that matches their skills. Academics who studied abroad and received a university degree that Germany recognizes have six months to look for a job. If they find one, they can apply for a Blue Card visa, which is initially valid for four years. To qualify, applicants must prove they have a job offer and a relatively high wage, a minimum of €52,000 ($60,700).

Blue-card holders tend to be computer scientists; 25 percent come from India. But there isn't the uptake that many hoped for, and the visa hasn’t helped fill Germany’s skills shortage.

Newcomers and job-seekers who aren't eligible for a blue card tend to get lost in a bureaucratic jungle, where different public officials try to answer multiple questions before giving a position to non-German: Is the applicant considered a graduate? Can the company not find a German applicant? Is there a shortage of people in this profession?

Simplify the equation

Arguably the most important factor to consider in modern immigration law is simplicity: the easier the application process, the more applicants. This holds true not just for academics but for skilled workers, who also need to have a job offer before they can obtain a visa.

There are signs that the government will relax immigration rules for skilled applicants without a university degree. With 1.2 million job vacancies, there is considerable incentive to quickly bring in qualified mechanics, nursing staff and technicians.

According to Mr. Seehofer, individuals who have obtained a qualification abroad will be allowed to come to Germany for six months to look for work. But they won’t have access to the country’s social services during that time. On the other hand, employment authorities will no longer favor German applicants over foreigners — supposedly.

Sven Böll, Sophie Crocoll, Isabella Escobedo and Cordula Tuitt wrote this article for Handelsblatt's sister publication, WirtschaftsWoche. Christine Coester adapted this piece into English for Handelsblatt Global. To contact the authors: [email protected]