Germany suffers significant losses due to skills shortage.
A recent study reveals that German businesses may be losing out on a substantial amount of money due to the lack of skilled labor. Researchers from the Cologne Institute for Economic Research (IW) claim that the German economy could see a substantial growth if businesses could meet their workforce demands, leading to an added value of 49 billion euros this year.
The researchers estimate that if the current need for 573,000 qualified workers is fulfilled, the country's production potential could increase by 1.1% in the current year. By 2027, this number could rise to 74 billion euros. The production potential is determining the estimated production capacity if the production lines are working at their fullest potential. To evaluate the skills gap existing in the market, researchers make extrapolations based on current demands. However, they also admit that these are conservative estimates, as they conclude every suitably qualified unemployed individual would find a job, despite it not being true for real life.
In their paper, IW experts emphasize that the most significant way to reduce the skill shortage is through more qualified immigrants. With the revised Skilled Immigration Act, there have been new opportunities created. To attract more women to join the workforce, more childcare facilities and alterations in taxation policies for married couples are necessary. Hiring older people will result in a positive effect as well.
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Economists argue that addressing the skills shortage in Germany could significantly boost the economy, potentially adding 49 billion euros in value this year alone. The current skills shortage, resulting in a need for 573,000 qualified workers, is estimated to limit the country's production potential by 1.1%, but with improved immigration policies and workforce diversity, this figure could increase to 74 billion euros by 2027.
Source: www.ntv.de
