Businesses issue warnings to the Merz administration: Draft could jeopardize employment opportunities
In a potential shift for the German economy, discussions have arisen about the reintroduction of compulsory military service, which was last seen during the height of the Cold War. This move, proposed by the CDU, has sparked concerns among business leaders and economists about its potential economic impacts.
A recent ARD Germany trend survey revealed that 73% of respondents support the reintroduction of conscription, while only 23% prefer it to remain suspended. However, German business representatives express apprehension, fearing that a new conscription could pose an additional burden for companies already struggling to find workers.
The labor market strain and skill shortages are a significant concern. With Germany currently facing urgent shortages in critical sectors such as healthcare, education, and engineering, coupled with a record-low unemployment rate and relatively short average working hours, reintroducing conscription could exacerbate labor shortages by pulling young people out of the workforce and delaying their entry into education or careers.
Studies commissioned by the German Finance Ministry, such as one from the Munich-based Ifo Institute, warn that compulsory military service could lead to considerable economic burdens. Compared to a voluntary military service model, conscription would likely reduce overall national income due to individuals' time away from productive economic activities. Although voluntary military service is estimated to cost the government around €1.5 billion annually, the hidden costs of compulsory service, due to lost productivity and delays in career development, could be even higher.
Business leaders warn that reinstating conscription might worsen existing labor shortages, complicate workforce planning, and potentially reduce Germany's economic competitiveness. To counterbalance the labor shortage caused by military draft, policymakers might need to improve working conditions, integrate part-time workers better, and reconsider work hours and career lengths to maintain economic output.
Defense Minister Boris Pistorius (SPD) aims to expand the Bundeswehr by around 80,000 soldiers over the next ten years. To address the acute skills shortage in sectors such as health and education, Chancellor Friedrich Merz (CDU) proposes a weekly working time. Alternatively, economist Panu Poutvaara suggests equipping the Bundeswehr with more resources to make it a more attractive employer, such as by increasing salaries, as an alternative to conscription.
Critics, such as Richard David Precht, question whether Germans can wage war, while Carlo Masala dismisses concerns about the economic impacts of a return to conscription as "exaggerated". However, a representative of another business group stated that there are "many open questions" regarding the reintroduction of conscription due to conflicting goals of economic prosperity and defense.
In conclusion, while strengthening national defense is a key objective, experts and business representatives caution that compulsory military service could impose substantial economic costs on Germany, affecting labor availability, productivity, and income levels. A voluntary military service model is generally seen as more economically sound and less disruptive to the workforce.
- The revival of compulsory military service in Germany, as proposed by the CDU, has sparked discussions among economists, business leaders, and education experts about its potential economic impacts and implications for career development.
- A study commissioned by the German Finance Ministry warns that compulsory military service could lead to economic burdens, with individuals' time away from productive economic activities reducing national income compared to a voluntary service model.
- Business leaders express apprehension that reintroducing conscription could worsen existing labor shortages, complicate workforce planning, and potentially reduce Germany's economic competitiveness, particularly in sectors like health, education, and engineering.
- To counterbalance the labor shortage caused by military draft, policymakers might need to focus on improving working conditions, integrating part-time workers better, and reconsidering work hours and career lengths to maintain economic output.
- Some experts, such as economist Panu Poutvaara, suggest equipping the Bundeswehr with more resources to make it a more attractive employer, such as by increasing salaries, as an alternative to conscription as it may be less disruptive to the workforce and the economy.
