Germany’s bold labour reforms aim to balance wages and skilled immigration
Germany is reshaping its labour market with higher wages and stricter immigration rules. The government has raised the minimum wage and tightened immigration policies to attract skilled workers. These changes come as unemployment holds steady at around three million, with economic growth at risk without more foreign talent.
In January 2025, the German Council of Experts on Migration and Integration (SVR) warned that immigration was vital for economic growth. The report stressed that without more workers from abroad, Germany’s growth could stall by 2029. The German Institute for Economic Research (DIW) echoed this, predicting a near-zero growth rate in four years if labour shortages persist.
The new policies will raise earnings for millions while tightening entry for immigrants. With unemployment steady at three million, the government’s focus on skilled labour aims to prevent economic decline. Success depends on whether these reforms can attract enough talent to keep Germany competitive.
