Labor market in Saxony: Employment of Germans declining or stagnating

Andreas Dunte

Leipzig. Leipzig is considered a boomtown in Saxony. Now the trade fair city has another special feature to show for itself: The number of German employees is increasing here. This is not the case in any other region in Saxony or in the whole of eastern Germany.

"Only Leipzig in Saxony is still benefiting from an increase in employment among German citizens," the state employment agency in Chemnitz said in response to a query. In a year-on-year comparison, over 1,400 additional employment relationships with Germans were created in the trade fair city.

In Saxony's state capital, the increase is due to foreign employees

This corresponds to an increase in employment of 0.5 percent. Leipzig is therefore an exception not only in Saxony, but in the whole of eastern Germany.

In Dresden, the number of German employees is stagnating. All other regions in Saxony recorded a decline. This is strongest in Central Saxony and the Erzgebirgskreis (both down 2.1%).

The fact that Dresden still has almost 3,000 more employees than a year ago is due to the increase in foreign workers. Leipzig recorded an increase of 5,000 additional jobs subject to social insurance contributions - 2,600 of which are attributable to foreign employees. The figures are from the end of 2023 compared to the previous year.

Overall, a demographically induced decline in the German workforce can be observed in Saxony, says Klaus-Peter Hansen, head of the state employment agency. Many employees are leaving the workforce due to retirement.

At the same time, the number of foreigners in employment subject to social security contributions is rising continuously and compensating for this decline. "This means that no jobs are being displaced by native workers. On the contrary, migration ensures that vacancies created by demographic change can be filled," says Hansen.

Every twelfth employee in Saxony is a foreigner

Of the 1.65 million employees subject to social insurance contributions in Saxony, 135,360 people have a foreign passport. This means that every twelfth employee in Saxony is a foreigner. The largest proportion, around 72,000, come from the EU, followed by third-country nationals with 63,000.

Most of them work in the manufacturing industry, in trade and in the home and social services sector.

"Never before have so many foreigners worked in Saxony," says the state employment agency. Compared to western German states, however, there is still a lot of room for improvement. Nationwide, the proportion of foreigners in total employment is 15.5 percent.

BMW has employees from almost 90 nations

Labor migration is much lower in rural areas. In contrast, cities like Leipzig attract many companies, which leads to more jobs, according to agency head Hansen. "In Leipzig, there is an active welcoming culture that enables the integration and employment of foreigners," says the labor market expert. Employees from almost 90 nations work at BMW on the outskirts of the city. The situation is similar at Porsche, Siemens, DHL and Amazon.

Since 2013, 61,200 additional jobs subject to social insurance contributions have been created in the trade fair city. As a result, Leipzig is also becoming increasingly attractive for commuters.

Data from the state employment agency backs this up: 73,791 Leipzig residents currently commute to work in another district. However, the number of commuters, i.e. those who travel to work from outside Leipzig, is much higher at 104,889 employees.

Ageing: Saxony in midfield

Hansen points to a forecast: while Leipzig and Dresden could expect gains, some districts in Saxony will lose more than one in ten working-age residents by 2032. The Erzgebirge, Vogtland and Görlitz are particularly affected. In addition, many Saxons still commute to work in western German states, mostly because of the higher wages there.

However, ageing is by no means a unique feature of Saxony. Saxony-Anhalt, Saarland, Mecklenburg-Western Pomerania and Thuringia are facing the sharpest population declines. Saxony is in the middle of the pack, followed by Rhineland-Palatinate and North Rhine-Westphalia.