Economist Field warns: the loss of 150,000 jobs — and the biggest collapse is yet to come.
The German industry is facing its deepest crisis in decades, with significant job losses already recorded, while the worst is expected to come. Economist Lars Feld warns that the labor market is still at the beginning of a sharp collapse driven by political indecision and rising costs.
According to Field, about 150,000 industrial jobs have already disappeared by 2025. Many affected workers are still officially registered with transitional companies, which hides the true scale of the crisis. When these arrangements end, a strong wave of unemployment is expected to hit the labor market completely.
Field emphasizes that the fundamental problem is internal. Production costs in Germany have become uncompetitive due to rising energy prices, labor costs, and regulatory burdens. As a result, companies are scaling back their activities or relocating operations abroad, putting entire sectors under severe pressure.
Vield directs sharp criticism at Chancellor Friedrich Merz, accusing him of lacking the courage to confront his coalition partner, the SPD (Social Democratic Party of Germany). The promised social welfare reforms are stalled due to the party's refusal to cut spending. Vield warns that this stagnation could bolster support for the far-right Freedom Party of Austria (FPÖ) in the upcoming elections.
Field attacks the excess of regulatory laws, demanding the immediate repeal of the heating law and the ban on combustion engines. He describes these policies as an administrative failure, considering that the energy transition in Germany resembles a directed economy, where the benefits of lower electricity prices are nullified by taxes and fees, leaving citizens feeling no improvement.
Social security systems are also under significant pressure. Field believes that early retirement should become less attractive through higher deductions to address labor shortages. He also calls for an expansion of reliance on private health insurance, warning that postponing the sustainability factor in the pension system until 2031 unfairly shifts the burden to younger generations.
There are only a few bright spots. The arms industry is experiencing growth due to the Russian threat, and the construction industry shows signs of stability thanks to infrastructure programs. However, Field warns that vocational rehabilitation takes time, and fears that the billions resulting from easing debt restrictions will turn into short-term electoral promises instead of real investments.
Field concludes with a clear result: Germany does not suffer from a lack of money, but from a lack of courage. Without real and unpopular reforms, the industry will continue to decline, jobs will continue to disappear, and the end of this economic collapse will remain out of sight.