The German labor market is under pressure, but the recent influx of Ukrainian refugees is “not a magic bullet” for labor problems.
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The German labor market is under severe pressure and the recent influx of Ukrainian refugees is unlikely to solve the country’s long-term labor problems.
The employment rate in Europe’s biggest economy hit a new high in the fourth quarter of 2022, with 45.9 million people employed, according to the German Federal Statistical Office. But more than half of German companies are struggling to find qualified workers to fill vacancies, Germany’s chambers of commerce and industry reported in January.
Apart from Poland, Germany has taken in more refugees than any other region since Russia invaded Ukraine a year ago. The conflict has ravaged swaths of Ukraine and seen eight million people flee in search of safety.
More than a million of these Ukrainian refugees have been recorded as having arrived in Germany, a country that has warmly welcomed them, with Chancellor Olaf Scholz saying he help Ukraine “as long as necessary”.
The arrival of these often highly educated Ukrainians could bring advantages to Germany, particularly in terms of strengthening its workforce.
Sylvain Broyer, chief EMEA economist at S&P Global Ratings, said the presence of refugees would be “positive” for the German economy at this time.
“For sure Germany is facing significant labor shortages and needs immigrants and Ukrainians,” Professor Panu Poutvaara, director of the Ifo Center for Institutional Comparisons, told CNBC. international relations and migration research.
“If I compare to previous asylum seekers, Ukrainians are clearly better educated and have integrated much faster into the German labor market,” he added, noting that Germany is an attractive country for people who seek to join the labor market.
A study by the EWL Foundation for Supporting Migrants in the Labor Market found that 22% of its 400 respondents chose Germany as their host country based on its job prospects.
But Ukrainian refugees cannot be expected to fill gaps in the German labor market.
This despite the fact that nearly half of the refugees who responded to the EWL survey said they had “at least some level of communication” in German, while 57% said they were currently learning the language. . More generally, Ukrainians are more fluent in the German language than most, and Ukraine is the fifth-largest learner of German in the world in absolute terms, according to the Goethe-Institut.
All refugees arriving in Germany can take part in a free integration course, which includes language, history and culture lessons, but gain the level of German proficiency required to fully participate in a n working environment. It’s not a quick process.
A few months in a country does not provide sufficient language exposure to be able to communicate confidently, according to Christoph Schroeder, a professor in the Department of German Studies at the University of Potsdam.
“You have to sit down and work,” he added, which is not necessarily compatible with keeping a job.
“The way forward is not to exclude people from the labor market until they [reach near native fluency]”, said Schroeder, “but to develop provisions so that you can … [improve] while working.”
Unsurprisingly, Germany has fast-tracked measures in place to allow Ukrainian language teachers to start working soon after arrival. Although it may be easier for teachers to enter the German labor market compared to other professions, this could cause future problems in Ukraine, according to Katharina Buck, deputy director of the Goethe-Institut in Ukraine – which itself fled to Germany as a result. of the war.
“One of Russia’s main goals in this war is…unfortunately to completely erase Ukrainian, the Ukrainian nation, Ukrainian culture — to erase it,” Buck told CNBC.
“If the carriers of culture, so to speak, the most educated people, stay away for good, that’s a huge problem for Ukraine,” Buck added.
AND report by the German Federal Office for Migration and Refugees shows that 72% of adult refugees have a university degree, while Ifo data suggests that a large percentage of Ukrainians will only accept jobs commensurate with their level of education.
Germany lacks “skilled” workers, but skills mismatch is “widespread” among Ukrainians entering the German labor market, according to the OECD.
“Higher levels of education … increase the risk of underemployment and skills mismatch,” the OECD report says.
The majority of Ukrainian refugees are highly educated, but most are also women, often with children, who must balance entering the labor market with family responsibilities.
“Ready to go home everyday”
Many Ukrainians want to return home as soon as they can, which limits their participation in the German labor market and is short-lived.
Research by the German Institute for Employment Research showed that 37% of Ukrainian refugees want to stay in Germany permanently or at least for a few years, while 34% plan to stay until the end of the war, 27% are undecided and 2% plan leave in a year.
The survey included data from 11,225 Ukrainian refugees, interviewed between August and October 2022.
Assuming Ukraine will win the war, the majority of refugees are likely to return to their home countries, according to Putvaara.
“At the same time, if I take the broader geopolitical situation, Germany has a very strong motivation in a strong and rebuilt Ukraine,” he added.
Buck says she sees Ukrainian refugees have a strong desire “to stay as flexible as possible” and “to be ready to go home every day” through her work at the Goethe-Institut.
“It would be rather myopic if we thought that these Ukrainians, they can now fill our shortage of skilled labor that we have in Germany,” she told CNBC.
“Of course some of them will. You know, they are free people, they can make choices and, yes, some of them have already been quickly absorbed by the labor market. [But] I think we really shouldn’t seek to foster that,” she added.
According to Steffen Kampeter, director general of the Confederation of German Employers’ Associations, the expectation that the movement of refugees out of Ukraine will have a “lasting” and “positive” impact on the German labor market is a “misperception ”.
“It would be a mistake if we saw the war, the Russian aggression as a source of improving our situation in the labor market…Maybe it could help a little, but…it will in no way solve the problem longer term,” he added. said.