The labor market situation of recent years shows: High employment and low unemployment are possible with the right policies and in a flourishing economy.
About the topic
The German labor market has been in a state of flux in recent years: Due to structural change and digitization, jobs have been lost in some sectors, for example in mining or industry, but at the same time many new jobs have been created in the digital world of work. However, despite recent successes, millions of people are still looking for a job, although skilled workers are becoming scarce as a result of demographic change. Going forward, therefore, the goal remains to increase labor force participation, promote occupational mobility, make it easier for people to get into jobs, and keep the shortage of skilled workers at bay for the economy.
Meanwhile, the demands on employees are changing rapidly. Digitalization and internationalization are shaping the world of work. Aging and heterogeneous workforces pose difficult tasks for HR policy. Companies are well equipped if they succeed in balancing the different requirements.
Employees' earnings, i.e. wages and salaries, can be freely negotiated with their employers - in some cases, the leeway is limited by collective agreements. Wage policy also determines how many skilled workers employers can retain. Overall, wages have risen steadily over the past few years, which has led to an increase in prosperity.
German Wage Policy between Inflation and Stagnation: Are Conflicts with the Aims of Monetary Policy Looming?
After the economic and financial crisis of 2008/9, the German labour market soon began to recover, creating scope for a comparatively expansive wage policy.
Andrea Hammermann / Oliver Stettes IW-Report No. 16 28. March 2024
Orphaned executive chairs in German companies
In 2023, half of the companies in Germany reported increasing problems in filling vacancies for management positions because employees are not aiming for a career. Larger companies are less affected than small companies.
Helena Bach / Carolin Fulda / Sandra Vogel IW-Trends No. 1 12. March 2024
The Pros and Cons of Trade Union Membership
The decline in collective bargaining coverage in Germany is often attributed to the reluctance of companies to join an employers' association which negotiates collective agreements.
Research Unit: The World of Work and Collective Bargaining Policy
The labor market situation of recent years shows: High employment and low unemployment are possible with the right policies and in a flourishing economy.
German Wage Policy between Inflation and Stagnation:
Are Conflicts with the Aims of Monetary Policy Looming?
Hagen Lesch
After the economic and financial crisis of 2008/9, the German labour market soon began to recover, creating scope for a comparatively expansive wage policy.
Leadership in transformation:
Megatrends and management as a driver of change
Lena Suling / Julia Wildner
Leadership dynamics in companies are subject to constant change in order to meet the challenges of their time. Today, the greatest influences result from developments such as demographic change, globalization, individualization, structural change and technologization in the economy.
In 2023, half of the companies in Germany reported increasing problems in filling vacancies for management positions because employees are not aiming for a career. Larger companies are less affected than small companies.
The decline in collective bargaining coverage in Germany is often attributed to the reluctance of companies to join an employers' association which negotiates collective agreements.
Graduates in Germany are distributed very unevenly across the country. Taking the population aged between 35 and 44, who have generally already completed their higher education, in 2019 the highest proportions of university graduates were to be found in Berlin and the Munich regional planning area.
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German Economic Institute (IW) 
