A new report warns of a “turning point” for Germany
A new report from the state development Bank KfW has warned of a “turning point” in German prosperity due to the current shortage of skilled workers and weakening labor productivity.
According to the Frankfurter Allgemeine Zeitung (FAZ) newspaper on Monday (23.01.2023), the chief economist of the official credit institution, Fritzi Köhler-Geib, stated that “The combination of a declining national labor supply in the long term and weak productivity development represents a unique challenge which is new for us in the post-war period”.
If nothing changes, Germany might be facing an “era of persistently stagnant, possibly gradually declining, prosperity” before the end of this decade.
To avoid this outcome, the bank suggests that the labor supply be increased through immigration and other measures, reducing bureaucracy and promoting innovation in the German labor market. The bank stresses that none of these measures alone can solve the problem.
The KfW report supports the need for such action. It highlights both the shortage of apprentices in the German labor market and the need to make work more productive.
The report is a grim reminder of the current situation and the potential consequences if nothing is done. (dpa/tagesschau)