MIGRATION-GERMANY: Germany Accepts That It Needs Foreign Labour

By IPS Correspondents Reprint | | Print |

Analysis Yojana Sharma

BERLIN, Feb 25 2000 (IPS) - For the first time since Germany put a stop to labour imports in 1973, the country has acknowledged that its economic growth depends on importing skills from India and Eastern Europe.

German Chancellor, Gerhard Schroeder, said in a speech this week that the dramatic shortfall in skilled workers required by Germany’s mushrooming information technology (IT) industry would be reduced by issuing work permits to non-European Union workers.

Schroeder’s speech has unleashed a new debate which could slowly change perceptions about the contribution of foreign workers to the economy. Analysts say this could pave the way for a new immigration law to replace the present rigid ban on immigration.

Within a day of his speech it became clear that Schroeder had opened the floodgate of demand from industry. President of the Federation of German industries, Hans-Olaf Henkel, declared that specialists in pharmaceutical research should also be given special permits to work here.

The ministry for Education is trying to find ways to retain foreign students who come to Germany for research and allow them to enter the job market.

The Chancellor said in a speech Wednesday he would seek agreement with industry on a ‘fast track’ method to speed up the entry of foreign workers particularly of information technology specialists.

Schroeder used the CeBIT information technology fair in Hannover to announce plans to set up new rules for importing workers.

Under his chairmanship, two Commissions would be set up. One to make it easier for asylum seekers and refugees in the country to take up work, and another to introduce a permit system similar to the US ‘Green card’ to help companies import IT specialists from overseas.

Senior officials have said that apart from allowing specialists, the strict rules on labour imports would be reworked. Since 1973, the only exceptions to non-EU workers are au-pairs, import export companies, apprentices, artists and models.

In all other cases the authorities must first check if the position cannot be filled by a German – and even then they take several months to provide a permit.

The bureaucratic barriers to acquiring work permits for workers from overseas is ‘hair-raising’, IBM’s Chief in Germany Erwin Staudt told a newspaper recently.

“The amount of time and energy spent with the authorities is enormous.”

In the whole country in 1998 only 581 work permits were issued for IT workers. The figures for 1999, as yet unavailable, are thought to be similar.

German industry has, in the past, depended on migrant workers.

Its economic boom of the 1960s could not have happened without the thousands of Turkish ‘guestworkers’ and to a lesser extent workers from Yugoslavia and Italy.

But it has been the break neck speed of developments in the IT industry that has challenged the country’s strict migration laws.

Referring to the country’s internet fever, which has reached a high pitch in recent weeks, Schroeder said: ‘We cannot throw away the revolutionary mood of the moment,” he said, “we have to seize every opportunity to grow.

Nonetheless Germany’s Trade Unions are anything but revolutionary. Walter Riester, Labour minister had previously rejected any relaxing of rules on imported labour because of the huge overhang of unemployed in Germany.

Riester pointed to the four million jobless in the country, according to them some 30,000 of the jobless are in the information technology sector and 50,000 are engineers.

He insists the jobless have to be retrained to fill the gap before immigrant labour can be allowed in. The Federation of German Trades Unions has also been opposed to imports.

Yet this week Franz Schoser director of the Chambers of Industry and Commerce (DIHT) said: “The labour supply is drifting increasingly away from labour demand.”

He warned that although German business confidence had reached a five-year high, in some sectors production was constrained by shortages of engineers and technicians.

Federal Minister for Education, Science and Research Edelgard Bulmahn warned this week that the existing unemployed could not be retrained in a short time.

German high tech companies could flee abroad for lack of skilled workers she told her cabinet colleagues during a heated debate this week.

“We cannot allow it to happen that companies migrate abroad because of a shortage of skills in information technology.”

She believes that some 250,000 jobs will be unfilled by next year unless something is done to bridge the gap. Even now, computer firms say they are unable to fill some 75,000 jobs according to the Federal Association of Information Technology, Telecommunication and New Media (BITKOM).

Companies are forced to scale back expansion plans.

BITKOM’s president Volker Jung said that the United States experience had shown that for every specialist imported from overseas, five jobs were created at home.

BitKOM expects demand for specialists to rise to 300,000 by 2003. Even with current plans to expand training in the sector, it will take years to bridge the shortfall.

In 1999 the Germany’s institutes of higher learning turned out just 10,000 qualified people.

In particular young start-up entrepreneurs are being held back by the lack of qualified people. Even in Britain which is considered to be two to three years behind the United States in information technology but years ahead of other European countries including Germany, the lack of qualified personnel is leading to scaled back plans by entrepreneurs.

“The only way for an internet start-up company to get skilled people is often to take over a company which already has such people,” noted a London-based venture capitalist.

At IBM’s German headquarters in Stuttgart, some 3,000 specialists are needed a year. Rewards are offered to employees who succeed in enticing qualified friends or acquaintances to the company.

IBM is already sending 1,000 ambassadors into schools in order to seek out talent as young as possible.

The Software company SAP says it has to go to where the skills are available – to Bangalore in Southern India, a huge centre for software technicians, Moscow or Singapore.

But there is more to it than merely plugging a gap in skills. Norbert Walter, Chief economist for the Deutsche Bank said a migration policy is essential in a country where the population is ageing.

“I am in favour of a selective migration free from bureaucracy,” he said pointing to the declining birth rate in the country.

He predicted that the shortage of young people to prop up the country’s huge pension bill in the future could lead to “immigration chaos” in the future unless the issue was not tackled in an orderly way now.

However Germany is still a long way from the idea that immigrant labour is ‘pure gold for the Economy’ as the US Wall Street Journal said in a headline recently – and the paper referred to all immigration including those who undertake menial jobs and seasonal farm labour crossing the border from Mexico, not just the most qualified.

Diplomats in the German capital note that in comparison to virtually every other European Union country foreigners are still regarded with distrust here.

“There is still this view that non-Germans are either a burden on the social security system or taking away jobs from Germans and unfortunately these prejudices are promoted by politicians, particularly of the conservative political parties,” said one non- EU diplomat here.

Just weeks after the SPD came to power after the 1998 national elections interior minister Otto Schily rejected the need for a specific immigration law with quota’s for particular skills saying ôthere is no need for an immigration law because if we had one, the quotas would be zero.”

In a highly controversial interview with a newspaper, Schily then unleashed a storm of protest within his own party and in the opposition when he said ‘more migration cannot be tolerated’.