Demographic Change on the labor market – Less “Islands of growth”

The biggest problems of the demographic change will occur in eastern part of Germany. The reason could be that after opening the border in 1989 there was a low rate of annual birth numbers which leads together with an ageing population to a decrease of the population. It is estimated that in about 50 years there will be living nearly  4,7 million people (36%) less than today (just in Eastern Germany). Whole Germany will loose 17 million of its 82 million inhabitants.

These numbers refer to the demography report by the federal government, which was presented by the interior minister Hans-Peter Friedrich (CSU). The highest decrease is expected in Sachsen-Anhalt and the lowest in Hamburg (-6%), Bremen (-14%) and Bavaria (-15%). For the whole country the decline in the population is predicted with 21%. Many regions, districts and communities are changing from a growing to a decreasing category. This will be the situation over the next decades. There will still be regions which will grow over the next 20 years but these figures are getting significantly less. In the longer term only individual “Islands of growth” remain in powerful economic regions.

Germany will loose its status a major economic power, especially in comparison to China and India. But also countries like Great Britain and France will overtake Germany in the future. It is not just because the higher birth rates. Furthermore these countries know better how to lure qualified immigrants.

When does the consequences be noticeable?

The consequences already occur. Despite many effort by the politicians the birth rate is stagnating since many decades on less than 1,4 children per women. At the same time the life expectancy is growing from year to year: every decade around three years.

There are two factors which are important for the defense against the demographic threat: 1. the quantity of employment and 2. the level of labor productivity. The higher is the amount of people who work in a country the higher will be the pot loans, taxes and social securities can be financed out of. Coming to the aging of the population we need an increase of the the employment rate and a growth of the productivity.

Within both points Germany is not in a leading position. In an international comparison Germany shows a low employment rate with about 65%. This rate is quite low for employees over an age of 55 years and young people below 25 years.



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