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EACEA National Policies Platform


3. Employment & Entrepreneurship

3.1 General context

Last update: 5 June 2024
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  1. Labour market situation in the country
  2. Main concepts

Labour market situation in the country

The German labour market

The German labour market has proven to be relatively stable during the crises of the last few years. Neither the COVID-19 pandemic nor the war in Ukraine or its repercussions have so far led to a significant decline in employment rates. The official statistics of the Federal Employment Agency (Bundesagentur für Arbeit, BA) revealed an unemployment rate of 5.3% in November 2022. This is also the result of government interventions such as extended periods of eligibility for the short-time work allowance (Kurzarbeitergeld), which is paid by the Federal Employment Agency.

In Germany, being in employment is seen to be very important. Apart from providing a secure livelihood, it is crucial for social integration. German labour law offers strong protection against dismissal. Collective bargaining parties (on the employer side, associations of employers; on the employee side, the unions), play a central role in deciding wages, working hours and other working conditions. In the event of unemployment, employees are paid unemployment benefit (Arbeitslosengeld) or citizens' benefit (Bürgergeld).

According to the Federal Employment Agency statistics (Bundesagentur für Arbeit, BA), 2,434,000 people were unemployed in November 2022, 203,000 of whom were aged between 15 and 25 years. This means that the average unemployment rate for the under-25 age group was 4.3% in 2022 compared to 4.9% in 2021. However, significant regional differences exist between the federal states (Länder) and individual agency districts. There is still a high level of unemployment among under 25-year-olds without a vocational qualification; in October 2021, the statistics of the BA revealed a 50.8% unemployment rate in this group, which means that lack of vocational training should be considered a risk factor.

One serious problem on the labour market, which has become increasingly apparent in recent years as a result of the demographic change, is the shortage of skilled labour. Companies are finding it increasingly difficult to satisfy their need for qualified workers. According to a study by the Bertelsmann Stiftung, this applies not only to the skilled trades, such as the heating, air conditioning, mechatronics and automation sectors, but to an increasing extent to healthcare, nursing and teaching professions. Government strategies to counteract these shortages include professional development and training programmes for employees, schemes facilitating the arrival of qualified skilled workers from abroad, but also improved career guidance services for young people. Given the skilled labour shortage, it is also important that young refugees can be integrated more easily into vocational training programmes and employment.

According to another study on the training prospects of young people with a low level of school education published by the Bertelsmann Stiftung and German Children and Youth Foundation (Deutsche Kinder- und Jugendstiftung) in September 2022, the career prospects of school-leavers with a lower school-leaving certificate (Hauptschulabschluss) play an important role. Altogether 22.5% of school-leavers in 2020 had this kind of school-leaving certificate. Even if around three quarters of these young people intended to complete an apprenticeship or training, a significant number ended up in a so-called transition system, where they completed pre-vocational training schemes and college-based courses. Given the growing number of unfilled training places, this should be considered a problem.


National studies and reports

The current situation on the labour and vocational training market in Germany is regularly monitored and the findings are published in the reports of the Federal Employment Agency, such as in the publication Situation on the Training Market (Situation am Ausbildungsmarkt), last published in October 2022.

A wide range of studies and specialist publications support the federal government's (Bund) labour market and education policy-making. In Germany, programmes and initiatives relating to vocational training and the labour market are systematically monitored and evaluated. The results of this monitoring process are published in the Vocational Education and Training Report (Berufsbildungsbericht), the data report (Datenreport) as a supplement to the Vocational Education and Training Report and the Education Report (Bildungsbericht), among others.

  • The Federal Ministry of Education and Research (Bundesministerium für Bildung und Forschung, BMBF) submits an annual Vocational Education and Training Report (Berufsbildungsbericht), most recently in May 2022. It describes the current situation on the vocational training market and provides an overview of the federal government's activities and programmes in the field of vocational education and training policy.
  • The Vocational Education and Training Report is supplemented by the data report (Datenreport) issued by the Federal Institute for Vocational Education and Training (Bundesinstitut für Berufsbildung, BIBB), last published in 2022. The data report is the main source of information and data for the Vocational Education and Training Report. It illustrates developments in vocational training.
  • Since 2006, the Federal Ministry of Education and Research has published its biannual report on education in Germany (Bildungsbericht), most recently in 2022. It uses indicators to support the information it provides on the German education system as a whole, from early childhood education to adult education. In its special chapter, the current report focuses on the subject of people working in education.
  • The Federal Employment Agency's annual analysis of the skills shortage (Fachkräfteengpassanalyse) identifies professions where it is relatively difficult to fill registered vacancies as a result of the skills shortage. The analysis is available for Germany as a whole, with the exception of occupational subgroups.
  • The annual business reports (Geschäftsberichte) of the Federal Employment Agency (Bundesagentur für Arbeit, BA) provide information on the impact of labour market policy. The BA also produces a monthly report on the labour and training places market for under-25-year-olds.
  • The Institute for Employment Research (Institut für Arbeitsmarkt- und Berufsforschung, IAB) of the Employment Agency carries out research into the labour market and professional world, and thus creates a basis for empirically founded labour market policies.

Main concepts

The federal government's skilled labour strategy (Fachkräftestrategie) is a response to structural changes and the related challenges of securing skilled labour and the labour market in Germany. It is one of the priorities of its labour market and educational policies. Securing and expanding a good skills base in Germany is therefore key to the innovative capacity and competitiveness of the German economy. The aim of the federal government's skilled labour strategy is to put in place the conditions and develop specific support services for the labour market of the future.

Another important response was the introduction of a statutory minimum wage (Mindestlohn) in Germany in 2015, which increased to 12 euros an hour in October 2022. The minimum wage is the lowest amount an employer can pay employees. The minimum wage is regulated by the Act Regulating a General Minimum Wage (Mindestlohngesetz).