Right now we are indeed in a situation where both are true: shortages and rising unemployment. At first glance that seems contradictory, but the reasons are clear. Until three years ago, the shortage was extreme – essentially the highest since the postwar boom, with 2 million vacancies. The economic downturn has changed that somewhat, but much of the record-level tightness remains. At the same time, unemployment is rising because certain sectors are in crisis – above all industry, which is losing more than 10,000 jobs every month. Other sectors, by contrast, are still expanding strongly: healthcare, childcare, education, transport, or segments of industry such as defence. On top of this, demographic trends mean we will lose 7 million workers over the next 15 years. Taken together, this leads to the paradoxical situation that even in occupations where workers are scarce, unemployment is also rising.

What we need now is a strategy of further development. Our weakness at the moment is that industry is not renewing itself enough. New industrial opportunities could emerge in wind power, hydrogen, storage technologies, or the circular economy. So we should enable people now working in shrinking sectors to develop further. That does not mean complete retraining, because we still need mechanical engineers, electricians, energy technicians, and so on for the transformation. These are essentially the same technical core skills that are required.

Prof. Enzo Weber is head of the „Forecasts and Macroeconomic Analyses“ research department at the Institute for Employment Research (IAB), holds the Chair of Empirical Economics at the University of Regensburg, and is an IZA Research Fellow. His areas of expertise include labour market developments and the business cycle, as well as technological change and economic transformation, labour market reforms and policy, economic crises, demographic change, and social security.

Exactly. But there are obstacles – which is why it isn’t really working yet. If I’m working in the auto industry, I may not know where else my skills are needed. Good advice, job matching, and targeted training are essential. The core competencies are there – but workers need to develop further in terms of applications.

Yes, sometimes there is a temporary wage gap. But right now people are often pushed into early retirement with severance packages. It would be better if part of the severance were used to support retraining measures and supplement pay in the new job. That way, by the time the jobs – and the people in them – have fully developed, we would already be back at a high level. That would be smart policy. I call it, in short: „upskilling instead of reskilling.“

In this transformation phase we need a new kind of labour-market policy – one that works in networks with the companies involved to drive further development. Traditional labour policy focuses on the unemployed. Here, it’s about workers who need to be redirected. Some regions are already experimenting with „labour-market hubs“, with promising pilot projects. But that’s not enough. Policymakers must steer labour into the emerging sectors effectively and purposefully. That also requires a clear economic-policy line on which areas of the transformation are future-proof – such as e-mobility or wind power – instead of confusion, as with heating technology. Not only potential investors need clear orientation, but also people who are, in a sense, investing in their own careers.

We need to make more of migration. Germany has attracted immigration for many years, but migrants often do not fully realise their potential. They work below their skill level – due to language barriers or unrecognised qualifications. We need a proactive strategy that combines recognition of prior skills with job-related training and language support, culminating in a German qualification. Because if people don’t see the career prospects they expected, many will leave again. Germany has a fairly high emigration rate.

Yes. We should make far more use of our real strength: our excellent training system and universities, where students can study for free and receive internationally recognised degrees. We should bring people from abroad directly into universities and vocational training. They would then earn a German qualification, integrate during that time, and learn the language. A systematic immigration channel would also need better counselling on residence rights, access to the labour market, and organised company contacts. Internationally, we already have a good retention rate of students who stay – but the potential is much greater.

A lot. The real potential is not just that women could work a few more hours. The bigger issue is the „secondary earner model“. Women start out on equal footing with men, but in their 30s, careers often stall after motherhood – and don’t really recover. That’s not because they all become housewives – that model hardly exists anymore. Instead, they end up sidelined at work and miss out on development. Several factors play a role, including insufficient childcare. Flexible working models could help, as well as stronger financial incentives.

Older workers in physically demanding jobs already struggle to reach retirement age. Instead of pushing them into early retirement, we should help them transition into related roles – a „qualification wave 50-plus“, offering perspectives for the coming years. That would require career counseling tailored to individual abilities. But why set a fixed age limit in employment contracts at all? Why not say: the employment relationship may end at retirement age, but doesn’t have to? That would flip the default – so instead of automatically stopping, both sides would sit down and decide how to proceed.

Investments in the school system are the most powerful lever. Dropout rates are rising again, and that’s worrying. There will always be some young people entering the labour market with shortcomings. So we also need low-threshold options in vocational training, such as step-by-step training programmes alongside work – especially for those with negative school experiences or little parental support. Otherwise, many end up in low-skilled jobs where they earn minimum wage quickly but often remain stuck. As a result, the share of young workers without vocational training has been rising for some time. It’s currently 13%, growing on average by 2.5% a year.

Neither. It depends on how we use it. From a business perspective, it only makes sense to deploy technology if it takes over tasks currently performed by humans. That creates pressure and risks. But the real opportunity is in human development – in upgrading tasks and skills. And a lot is possible. Since the 1990s, the share of jobs involving complex tasks has risen by more than 10% per decade. With AI, capabilities such as learning agility, abstraction, communication, and flexibility will be even more in demand. These can make for excellent jobs. If I ask myself: Am I really doing in my job what I originally trained for? Is my current role really my optimum? Or would it be better if I could hand off some tasks and focus on what I actually want to do? Then I’m already on the path of further development. And that’s the right path.