Berlins labour market and economy overview

The Capital of Germany has a population of 3.4 million people and after Hamburg it has the highest proportion of residents with foreign nationality. The most of these foreigners are originate from Turkey and Poland.

Ages ago as Berlin was the capital of Prussia, there were manufactured luxury goods for the Prussian court and weapons to supply Prussian military. In the time of Industrial Revolution companies like Siemens and Bosh settled their production in this city and Berlin became Germany’s main rail hub and a leader in manufacturing of locomotives, other kinds of machinery and chemical industry sector. During the cold war the economy of the city decreases because the west part was isolated and East Berlin shared the same destiny like East Germany.

Even if since the reunion some manufacturing remains like Siemens and Schering, the service sector became the main engine of the economy of the city and also the main source for jobs. This was caused on the one hand by the movement of the federal government 1999 from Bonn to Berlin but also through the increasing tourisms. The German capital it the third most visited city destination in the European Union with 592 hotels 90700 beds and 17.3 million overnight stays and 7,5 million guests in 2007. Nevertheless the business services are the biggest employer within the service sector, followed by the health and social services and commerce and repair companies as well as public administration.

But the service sector couldn’t cover the high unemployment number which developed after reunion. Many companies from the east part of the city did not survived in the competition with the companies from West Germany and had to close. This leads until now to a disposable income below the German average. The unemployment rate is at 14,9% and the highest in Germany. Less then 1.106 million people are working in jobs entailing compulsory social insurance and this number is increasing.


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