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Germany Chases a Fix for Its $35 Billion Immigration Problem

  • Some 400,000 migrants needed a year to offset labor shortage
  • Merkel squeezed as business needs collide with public outcry
Frankfurt's Financial District As Brexit Prompts Move For 18 Banks
Photographer: Krisztian Bocsi/Bloomberg
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Germany has an immigration problem, but it might not be what right-wing extremists think it is. Rather than too many foreigners in the country, economists fret there won’t be enough.

With baby boomers retiring and not enough young people joining the labor market, the country needs at least 400,000 people coming to work in Germany every year to maintain its competitiveness, according to the IAB Institute for Employment Research. A shortage of skilled workers means businesses won’t be able to produce as much as they could, holding back the economy by about 30 billion euros ($35 billion) a year, research by the Cologne Institute for Economic Research shows.