The German economy is at a critical juncture. Current figures show that the country's industrial core is increasingly eroding. At the end of the first quarter of 2024, German industry still had 5.46 million employees – a decline of 1.8% or 101,000 jobs compared to the previous year. This trend will continue throughout 2024 with a minus of 1.2%. The political promises of a turnaround in the labour market have so far had no effect – on the contrary, the reduction continues to accelerate.

At the same time, the public service is growing significantly. By June 2024 alone, the number of civil servants had risen to around 5.4 million – almost 100,000 new jobs. While private companies are cutting staff, the state is building up – financed by taxpayers' money and at the expense of future generations.

In the fourth quarter of 2024, the turnover of industrial enterprises fell again – by 2.5%. It is the sixth quarter in a row with declining figures. The automotive industry has been hit particularly hard: more than 45,000 jobs were cut last year alone. The reasons for this are the difficult transition to e-mobility, high energy prices and weak demand.

The electrical and chemical industries are also reporting significant slumps. While the electrical industry lost around 16,000 jobs, chemical production collapsed massively. Companies such as BASF and Evonik are cutting thousands of jobs – a reaction to rising energy prices, falling production volumes and the ongoing economic downturn.

Other sectors are coming under pressure: 4% of jobs were lost in the textile industry, and 2.4% in manufacturers of rubber and plastic goods. There is no relief in sight for 2025. Large employers such as Deutsche Bahn (30,000 jobs), ZF (14,000) and Thyssenkrupp (11,000) are announcing further cuts.

Three main factors are driving the exodus of industry: exorbitant energy costs, excessive regulation and high non-wage labor costs. Germany is considered the country with the highest energy prices in Europe. At the same time, new requirements in terms of climate protection and CO₂ pricing are placing an additional burden – with rising costs or relocations abroad as a result. In addition, there are rising social security contributions and taxes, which further reduce the attractiveness of the location. >>ADVERTISING
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While the private sector is cutting jobs, the public sector continues to grow – despite empty coffers. In 2024, roughly 5.4 million people worked in the civil service, 1.8% more than in the previous year. Almost one in eight employees now works for the state.

At the same time, according to politicians and trade unions, there is an alleged shortage of over 500,000 skilled workers in the public sector. Instead of demanding efficiency and task criticism, these demands are based on the model of an all-round welfare state. As a result, the state apparatus continues to inflate – without regard to financial sustainability.

This course is financed by new debt: The federal government is planning record new debt of 846.9 billion euros. Officially, this serves to expand security and infrastructure – but in fact a significant part will flow into new jobs at the federal, state and local levels.

number of employees in the education and social sector is growing particularly strongly. Around 1.05 million people were employed in schools in mid-2024 – an increase of 19,500 within one year. The number of employees in daycare centers also increased significantly. Since 2009, the number of educators has more than doubled. In addition, ministries and authorities are massively increasing their workforce – although a reduction in bureaucracy was once promised.

The universities are also recording a significant increase in jobs: over 14,000 new employees in one year. In the last 15 years, the academic sector has grown by over 40%. The reason for this is rising student numbers, new courses of study and higher research budgets – all financed by the state. But at the same time, there are warnings that the job market for academics is already saturated. Many graduates therefore aspire directly to the civil service – one in four students plans to take this step.

While the state is expanding, industry – the backbone of the German economy – is losing hundreds of thousands of jobs every year. The increasing dependence on the state with simultaneous erosion of the tax base cannot work in the long run. If the productive sector continues to shrink, the financing of the growing state apparatus will also become a burden – with far-reaching consequences for prosperity, freedom and sustainability.




Author: Tom Weyermann
Sources: NIUS, REUTERS, BWM