German Economy and Employment
Germany is the largest European economy and the fourth largest economy in the world, accounting for 5.4% of the global GDP. The growth of the Germany’s technology-driven economy largely depends on exports as Germany is the world’s third biggest exporter, having the largest nominal trade surplus in the world. The total German labour force is about 45 million while the unemployment rate is extremely low at 4.2%. There is virtually no unemployment in large German cities. The only regions affected by unemployment are the rural areas, mainly in the north-east. Hence, it is not surprising that Germany is also one of the world’s largest importers of foreign workforce as 3.3 million foreigners already work in Germany.
The German Job Market for Foreigners
The German job market currently has 1.2 million job vacancies. This alone presents tremendous work opportunities for foreigners. Yet, due to the large size, stable growth and undergoing structural changes in the German economy, hundreds of thousands of new jobs are created each year. The German labour market lacks skilled professionals in several important areas and German government and employers are welcoming foreigners to fill this gap. Moreover, Germany is known for its aging population. It is estimated that by 2025 more than four million Germans will retire. This will create further opportunities for foreigners wishing to live and work in Germany.
Working Conditions in Germany
German Labour Code (which is actually a set of employment laws) provides a high level of protection to all employees. With a five-day working week, the maximum working hours are defined at 40 hours per week while most employees work 38.5 hours a week. All employees are entitled to a minimum of 18 days of holiday per year. However, most employers offer their employees 25-30 days of holiday. In addition, there are nine bank holidays in Germany and six regional holidays celebrated in different federal states. The minimum wage in Germany is 8.84 Euro per hour, that is 1,498 Euro per month.
Personal Income Tax
Germany has a relatively complicated taxation system. The personal income tax rate starts at zero and rises progressively to a maximum of 45% for high-income individuals (earning more than 260,000 Euros a year). In addition, there is a 5.5% solidarity surcharge (low-income individuals pay less or are excluded altogether) and an 8-9% church tax for registered church members that are levied on top of the income tax. Social security contributions (amounting to ca 22% of income until a certain ceiling is reached) are deducted from personal income before calculating income tax. Generous tax allowances are provided to families with children .
Job Vacancies in the German Economy
In the German labour market there is a continuously high demand for people with certain special skills. These include highly skilled individuals with university education such as physicians, engineers, teachers, natural scientists, mathematicians and IT specialists as well as qualified specialists with vocational education such as nurses, caregivers and skilled traders of different professions. Moreover, millions of Germans will retire over the coming years which will create demand also in areas where there are no shortages yet. Many experts believe that these gaps can only be plugged with foreign professionals enticed to work in Germany.
Which Professions Are Needed Most in Germany?
A lack of healthcare professionals, especially doctors and nurses, is a chronic problem of the German health sector. It is estimated that the German healthcare system currently needs about 5,000 physicians to fill the gap. The starting salary of a medical graduate in Germany is nearly 50,000 Euros a year, the highest among all university graduates. A doctor who has completed a medical training in any country (also outside the European Economic Area) that is equivalent to the medical training in Germany is eligible for a medical licence in Germany.
Worse yet for Germany, it is estimated that additional 150,000 nursing personnel, who are already in short supply, will be needed over the next ten years in German hospitals and nursing homes. Although not all nurses and other healthcare personnel may have their qualifications immediately recognized in Germany, the Federal Employment Agency (Bundesagentur für Arbeit) encourages foreigners to complete vocational training courses in Germany to become eligible for jobs in the German healthcare industry. As an example, see this project for Bosnia, Serbia and Philippines. For complete guide on the opportunities for foreign nursing personnel in the German healthcare sector read the article “Nursing jobs in Germany”.
Who Can Get a Job in Germany?
Who Needs a Work Permit in Germany?
Citizens of Third Countries
Foreigners coming from countries outside of the EEA need a residence permit for work purposes (also called residence permit for gainful employment) whereas in order to get this permit their employer must usually prove that there were no suitable candidates for the job amongst applicants from the EEA countries. This applies to all non-EEA nationals, irrespective of whether they need a visa to enter Germany or not.
However, exceptions do exist when it is not necessary to prove that there are no suitable candidates from within the EEA. For example, citizens of third countries who have earned their university degree in Germany can stay in the country for another 18 months while looking for a job. Once they have found a job that corresponds to their qualifications, they can convert their residence permit for study purposes into a residence permit for gainful employment. In addition, foreign graduates of German universities who left home after completing their studies can still return to Germany for job hunting (see Jobseeker’s visa below).
Likewise, foreigners from third countries who have completed a vocational training in Germany can have their residence permit extended for another 12 months to find a job that suits their qualifications. During this 12 month period they can take up any job to help cover their living costs in Germany until they find a work they were originally trained for.
Another exception are highly skilled individuals having a binding offer for any specialist job that pays them at least 52,000 Euros a year (applies to 2018). Also, there is an exception for certain specialist professions where there is a chronic lack of suitable candidates from within the EEA provided that the candidate has been offered an annual salary of no less than 40,560 Euros. These jobs include doctors of medicine as well as the so-called MINT professions (mathematics, informatics, natural sciences and technology/engineering). All those mentioned in this paragraph are eligible for the EU Blue Card (temporary residence title).
In addition, the Federal Employment Agency has whitelisted jobs with vocational training where shortages exist that are also available to applicants from non-EEA countries.
Jobseeker’s Visa for Germany
University graduates from countries that do not have a visa-free regime with Germany may apply for a jobseeker’s visa at the nearest German consulate or embassy. This visa is issued for six months. Besides a valid passport, other required documents for issuing a visa include a university degree, CV, letter of motivation and a travel insurance policy. Applicants must also prove that they can support themselves financially for six months as they will not be allowed to take up any employment in Germany during their stay on a jobseeker’s visa.
Latest Projects Aimed at Attracting Foreign Skilled Labour
- In 2014, the Germany’s Federal Ministry of Labour and Social Affairs launched a project dubbed “The Job of my Life” aimed at attracting young people aged 18-27 from other EU/EEA countries to come for vocational in-company training to Germany. The goal of this project is to help young people from those EEA countries that are plagued by high unemployment (e.g., Spain) find a job in Germany and thus secure skilled labour for the German economy. Here you can find more information about this project (at the bottom of the page you will find links to PDFs in German and in English).
- Nationals of Albania, Kosovo, Bosnia, Macedonia, Montenegro and Serbia now enjoy a preferential access to the German job market and vocational training courses. This project called “Arbeiten und Leben in Deutschland” started at the beginning of 2016 and will last till the end of 2020. Citizens of these countries can also apply for non-specialist jobs that are normally not available to citizens of third countries. More information can be found in this brochure.
- PuMa (Punktebasiertes Modellprojekt für ausländische Fachkräfte) is the new point-based model project that was launched in October 2016 in the federal state of Baden-Württemberg to facilitate an easier access of foreign skilled labour from countries outside of the EEA to the German labour market. This project enables citizens from third countries who successfully completed a vocational training recognized in Germany to take up virtually any job in Germany.