Germany's Eight-Hour Day Debate Intensifies as Workforce Gap Forecast Balloons to 4.3 Million
14.06.2026 - 13:03:27 | boerse-global.de
The country's labour minister is preparing a draft law to shift from daily to weekly maximum working hours, a move that has reignited a sharp debate at a time when a new projection shows the German workforce shortage worsening dramatically. By 2036, nearly 4.3 million workers could be missing from the economy—1.3 million more than last year's estimate, according to the employer-linked Institute of the German Economy (IW).
The revised forecast is based on updated population data from the Federal Statistical Office. Germany's population is expected to shrink 2.9% to 81.1 million by 2045. The potential labour force—people of working age—will fall from 55 million this year by 6.9% to 51.2 million in 2036, and by 8.3% to 50.4 million by 2045. The demographic driver is clear: all baby boomers born between 1954 and 1969 will have reached retirement age by 2036, while only 9.8 million people will enter working age in the same period.
"Why we need more flexibility now," the IW argues, citing the widening gap between those leaving and those arriving. But the institute's call for longer individual working hours and lower tax and social security burdens is meeting resistance. The head of the German Institute for Economic Research (DIW), Marcel Fratzscher, warned today against scrapping the eight-hour day. He backs targeted flexibility but cautioned that focusing on hours rather than productivity and quality is misguided. The Institute for Employment Research (IAB) wants incentives for overtime, while the Economic and Social Science Institute (WSI) points to health risks from longer shifts.
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The policy challenge extends beyond working time. The IW attributes this year's larger gap partly to lower immigration. Stricter migration policies, a sluggish economy, and growing labour market problems have cooled the interest of foreign professionals, especially in eastern Germany. The ifo Institute projects the potential workforce in the east will shrink about 7% by 2035. Industry and agriculture are shedding jobs, while health, social services, ICT, and scientific services are expanding.
Politics is now under pressure to deliver. The government is discussing consolidation contributions of €142 million by 2027 and €166 million by 2028, with ideas including freezing the mini-job threshold and raising employer levies on such jobs. Strikingly, the current shortage is at a five-year low: in January, only 22.7% of companies reported being affected, according to ifo. Yet the long-term trend leaves little room for complacency.
