germany

East Germany is running out of people

Despite an influx of 1.2m refugees over the past two years, Germany’s population faces near-irreversible decline. According to predictions from the UN in 2015, two in five Germans will be over 60 by 2050 and Europe’s oldest country will have shrunk to 75m from 82m. Since the 1970s, more Germans have been dying than are born. Fewer births and longer lives are a problem for most rich countries. But the consequences are more acute for Germany, where birth rates are lower than in Britain and France.

Source: photo alliance / dpa

If Germany is a warning for others, its eastern part is a warning for its west. If it were still a country, East Germany would be the oldest in the world. Nearly 30 years after unification the region still suffers the aftershock from the fall of the Berlin Wall in 1989, when millions—mostly young, mostly women—fled for the west. Those who remained had record-low birth rates. “Kids not born in the ’90s, also didn’t have kids in the 2010s. It’s the echo of the echo,” says Frank Swiaczny from the Federal Institute for Population Research, a think-tank in Wiesbaden. The east’s population will shrink from 12.5m in 2016 to 8.7m by 2060, according to government statistics. Saxony-Anhalt, the state to which Bitterfeld-Wolfen belongs, is ahead of the curve.

Berlin used to pay little attention to the area. But regional decline has already had a political effect. In a state election in March 2016, a populist party, the AFD, came first in Bitterfeld and second in Wolfen. Such places will matter in a federal election in September, which is expected to be tight. Bitterfeld-Wolfen has seen its population plummet from 75,000 in 1989 to 40,500 today. Even after administrators tore down blocks of flats, and cut floors off others, skeletal remains of buildings still await the wrecking ball. Nearly one building in five is empty. A grand Stalinist-era construction, once the town’s cultural palace, now stands deserted. Two-thirds of kindergartens and over half the schools have closed since 1990. The number of pupils finishing secondary school has fallen by half. Employers struggle to fill vacancies.Apprentices—especially in service industries—are hard to find. The one booming industry, care, is desperate for more geriatricians, nurses and trainees. To help fill the gap, the local Euro-Schulen, a training institute, has turned to Vietnam. Having studied German in Hanoi, 16 young apprentices started this month, with 20 scheduled to follow soon. Nearby Dessau is setting up a similar arrangement with China.

Germany has long relied on migrants to make up for low fertility rates. Unusually high migration in recent years has more than offset the shrinkage of the native-born population. But the EU countries that have traditionally provided the migrants, such as Poland, are also ageing. Migrant flows will slow; competition for labour will increase. And Olga Pötzsch, from the Federal Statistical Office, argues that Germany will need far more migrants to stop population decline, which is predicted to accelerate from 2020.

Uwe Schulze, a senior local official, says that refugees are not filling the labour shortage. Of the 2,600-odd asylum-seekers who arrived in the district in 2015 and 2016, fewer than a third are now registered as “capable of working” and only 40 are fully employed. From his wood-panelled office in a neoclassical building that once housed one of Europe’s largest colour-film makers, Armin Schenk, Bitterfeld-Wolfen’s mayor, says the problems are mostly to do with language, qualifications and uncertainty about asylum. Asked whether Afghans and Syrians could join the same programme as the Vietnamese, Liane Michaelis, from Euro-Schulen, forcefully shakes her head, citing educational, religious and ethical barriers for care jobs. She adds that “Those who do have the right papers leave quickly.” According to the OECD, about half of asylum-seekers who started in eastern Germany in the past moved to places such as Hamburg once they secured their permit.

With the odds seemingly stacked against it, Bitterfeld-Wolfen is at least trying. On a whirlwind tour of the town, Mr Schenk shows how the old coal mine was turned into a lake with a new marina and a promenade. He repeats the town’s main hope: “It’s all about offering good-quality life and leisure.” A brochure shows pictures of smiling children, yachts and tennis. Bitterfeld-Wolfen, it reads, is “one of the youngest cities in Germany”. But even if such marketing did stem departures (and in 2015, for the first time, inward migration slightly exceeded the outflow) it is still shrinking; more than twice as many die each year as are born.

Across many parts of rural Europe mayors struggle with similar problems, wondering when to turn their school into a care home. By 2050 Greece, Italy, Poland, Portugal and Spain—which, unlike Germany, have all suffered net brain-drains—will be older than Germany by median age and will have shrunk substantially, according to the UN. Ageing and emigration are likely further to dampen growth in central and southern European countries, says the IMF. It calculates that by 2030 GDP per person in several countries, may be 3-4% lower than it would have been without emigration.

In Germany, however, the consequences are particularly acute. With a strong economy and a tight labour market, some employers already struggle to fill vacancies. BCG, a consultancy, predicts that by 2030 the country will be short of between 5m and 7m workers. The triple shock of a smaller workforce, increased social spending and the likely dampening effect of an older workforce on innovation and productivity will drag down future growth, predicts Oliver Holtemöller from the Leipzig Institute for Economic Research. These effects are stronger in the east, he adds. Productivity is 20% lower than in the west; the ageing population and continuing migration to the west will make economic convergence even less likely.

source: economist.com

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