The number of unemployed in Germany has risen above the three million mark. This means unemployment has reached a sad ten-year record. At the same time, the civil service has grown significantly. Particularly striking: according to calculations by the German Economic Institute, Germany employs around 60,000 more civil servants than necessary. Without this increase, the number of unemployed would be much higher. (marktundmittelstand: 01.09.25)
Massive differences in civil servant numbers
The IW analysis shows that the public service has expanded significantly over the past ten years. At the municipal level in particular, the number of employees increased by 24 percent. The federal states increased their staff by 12 percent, while the federal government recorded only a 4 percent increase. This is increasing the pressure on the administration to realize real savings potential.
The researchers compared the development with factors such as demographics, infrastructure, and the number of transfer benefit recipients. Significant differences emerged. “Some municipalities managed moderate growth despite difficult conditions, while others increased their staffing levels above average,” the study emphasizes. It becomes clear that some regions relied on discipline, while others massively inflated the civil service apparatus.
Saxony-Anhalt Demonstrates Potential Savings
Saxony-Anhalt is considered a positive example. Its personnel policy was restrained and forward-looking. According to the IW (Institute for Economic Research), a similar approach across all federal states would have saved around 60,000 full-time positions. Since more than 80 percent of public sector employees are employed by federal states and municipalities, the effect would be enormous.
This comparison reveals the extent of the differences within Germany. Saxony-Anhalt proves that a functioning administration remains possible even with fewer civil servants. This is precisely where the crucial savings potential lies that other federal states have so far failed to tap.
Industry loses, public sector gains
The contrasts become particularly clear when comparing administration and industry. While industry lost 146,000 jobs subject to social security contributions in June, the public sector created 45,000 new positions. This imbalance is permanently changing the structure of the labor market.
New hires were primarily concentrated in education, childcare, health, and security. In contrast, there were declines in urban development. This increases the dependence of many regions on the public sector, while industry loses its foundation. The IW study shows that this trend poses long-term risks for the economy and society.
Conclusion: Civil servants at the heart of a reform debate
The study clearly shows that Germany is operating a costly public administration. The steady increase in the number of civil servants in the public sector exacerbates the contrast with the weakening industrial sector. The comparison with Saxony-Anhalt, in particular, demonstrates how a leaner system works and the potential savings that would be possible. Given rising unemployment, there is no way around a reform debate.