Reflections on Berlin’s Future

One thing I’ve noticed about the Euro crisis is that there are a lot of people (more than usual) coming to Berlin. Countries like Spain and Italy have really high unemployment and youth unemployment is especially bad. Even countries that are doing “better” still have problems, and Germany is (so far) relatively stable, and therefore attractive. For a while, I kept thinking, “Why Berlin? Why not Munich or Cologne?” After all, Berlin has high unemployment compared to the rest of the country and lower wages, so how are we to support an influx of people (mostly young people) from the rest of the Euro zone?

I gave it some thought, and decided that maybe things aren’t so dire. I’ve had a theory for a while (a rough theory anyway) that some of Berlin’s problems stem from its underpopulation and high vacancy rates. The city is built to house something along the lines of 5 million people, but it only houses about 3.5 (give or take…I don’t know the most recent figure). This leaves a lot of the city unoccupied and though there are a lot of services located here, they are often under-utilised. Perhaps more residents will solve this problem, if they can find work. This is easier said than done, but another thought is that a lot of the people coming here, while young, are relatively well-educated and often creative. A well-educated, creative, diverse work force can be a very attractive asset to a city. I heard a rumor (no idea whether or not it’s true but it sounds plausible) that the city is advertising a cheap work force as an asset. If this is true, I think it’s a mistake. A cheap work force is hardly a unique asset, and within Europe it’s likely to be challenged by other places full of people willing to work for less money. Even the cheap real estate of the city will likely find itself up for competition. A skilled, educated and creative work force, however, is more competitive. Just my two cents.

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