Migration: Where the German economy depends on foreigners

Around every seventh employee in Germany is a foreigner.

Migration: Where the German economy depends on foreigners

Around every seventh employee in Germany is a foreigner. They make up around 15 percent of employees with social insurance, according to statistics from the Federal Employment Agency (BA). In some professional sectors the proportion is much higher - and it is increasing. “Many industries are already heavily dependent on foreign workers,” says Ifo Institute migration expert Panu Poutvaara. An overview of the situation.

Sectors with a particularly high proportion of foreigners

According to Poutvaara and the Federal Agency's figures as of March 2023, particularly high proportions of migrants can be found, among other things, in cleaning workers at 41 percent, in food production at 38 percent, in civil engineering at 33 percent, as well as in tourism, the hotel and restaurant industries 32 percent. Migrants are also significantly overrepresented in the transport and logistics sector as well as in agriculture.

And the proportion of foreigners has recently tended to increase. They were still a bit lower in the summer of 2021.

The need

The economy has a positive attitude towards the immigration of workers. "We have to cushion demographic change in the next few years. Without skilled workers and workers from abroad, we will not maintain our prosperity," says the Federal Association of German Employers' Associations (BDA). One building block is “that we will quickly become significantly more attractive for qualified immigrants”.

And Martin Lange, labor market expert at the Center for European Economic Research (ZEW) in Mannheim, emphasizes: "Without immigration, our prosperity is at risk." Germany is in global competition. "If it positions itself as anti-immigrant, that will not make us attractive to other countries and professionals."

The development

In some professional groups it can already be seen how declining numbers of German workers are being offset by foreigners. An evaluation by the BA for the German Press Agency shows this for the period from 2018 to 2023, for example for the manufacturing industry: the number of Germans there has fallen by 285,000 and the number of foreigners has increased by 202,000. In the hospitality industry there are almost 64,000 fewer Germans and 72,000 more foreigners. There is also a similar trend in the finance and insurance sector: the number of Germans fell by 22,000, the number of foreigners increased by 19,000. Here, however, the proportion of foreigners is still well below average at just under six percent.

In some professions, however, the number of both Germans and foreigners is growing rapidly, for example in healthcare, information and communication or in education and teaching.

The origin of the workforce

According to Lange, people from other EU countries are primarily represented in manufacturing, trade, transport and also in the construction industry. People from the countries from which a particularly large number of asylum seekers have come in recent years can be found primarily in retail but also in transport and the hospitality industry, he says. "And people from the Western Balkans are now primarily employed in the construction industry because the Western Balkans regulation has been in place for a few years now, which allows skilled workers to work here if they have found a job in Germany through the regulation." Construction companies in particular made use of this.

The qualification level

According to Lange, both highly and low-skilled foreigners come. In some cases, immigrants experienced an effect called “downgrading”. They often have to “start as assistants and then switch to specialist or expert positions over time,” he says. It is particularly difficult for doctors or lawyers to have their professional qualifications recognized.