Seriously? When will you stop just carrying on like this? Bloated state: Germany keeps adding more and more civil servants

The economy stagnates, the state grows: The uncanny boom of German civil servants

Exploding costs, zero reforms: Who is supposed to pay for this bureaucratic apparatus?

Germany has a structural problem that hardly anyone talks about honestly: While the economy stagnates, budget gaps have to be painstakingly plugged, and citizens groan under a heavy tax burden, the civil service bureaucracy continues to grow relentlessly. Almost two million civil servants now work in Germany – and with each new civil servant, an incalculable financial risk grows. The already gigantic pension costs, currently around 66 billion euros per year, threaten to explode completely in the coming decades. But instead of tackling bold reforms, limiting civil servant status to core tasks, and finally consistently digitizing the administration, politicians are indulging in an expensive "business as usual" approach. A look at the current figures shows why the German civil service system, in its present form, is becoming a ticking time bomb for future generations – and why we will soon no longer be able to afford this luxury.

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Two million civil servants, 66 billion in pension costs, zero serious reforms – when will politicians finally wake up?

There are news reports that you read and pause for a moment because they are so symptomatic of the political failure of an entire era that you almost forget to be surprised. The Federal Statistical Office has presented the latest figures for the public sector in Germany as of June 30, 2024 – and they are, to put it mildly, remarkable. Not remarkable in the sense of unexpected; remarkable in the sense of: How can a country that has been discussing budget deficits, debt brakes, and loss of competitiveness for years simultaneously allow its state apparatus to continue growing unabated, as if there were no tomorrow?

The figures speak for themselves: On the reference date, there were 1.96 million civil servants, judges, and soldiers in Germany – 5.8 percent more than ten years prior. The entire public sector grew from 4.65 to 5.38 million employees during the same period, an increase of 15.7 percent. By comparison, the total number of employed people in Germany rose from approximately 42.8 to 45.9 million during the same period, an increase of only 7.5 percent. The state is therefore growing twice as fast as the economy that finances it. This is no small matter. This is a structural problem.

One could argue that growing government responsibilities require more staff. One could point to the shortage of skilled workers, the demographic challenge, the need for a functioning public sector. All of this is partly true. But anyone who reads these figures without simultaneously asking whether this apparatus also needs to become more efficient, more digital, and leaner is engaging in intellectual self-reassurance at the taxpayers' expense. Because with every additional civil servant, with every additional position, not only does the current cost burden increase—it also increases a responsibility to the future that no one has yet fully and honestly quantified.

Nearly two million: Who the civil servants are and where they work

Roughly one in three public sector employees – 36.4 percent to be precise – are now civil servants. This figure alone speaks volumes about the institutional preferences of the German state: those seeking security tend to find it in the civil service, and in Germany, "civil service" very often means civil servant status. The lion's share of these civil servants – 70.1 percent – ​​work for the federal states, which is directly related to the federal structure of Germany. Education, the police, the judiciary, and large parts of the administration are the responsibility of the states, and these are precisely the areas that are personnel-intensive and traditionally heavily reliant on civil servants. Nineteen percent of civil servants are employed by the federal government, while only 9.7 percent work for cities and municipalities.

A closer look at the fields of activity reveals the internal logic of this system. By far the largest group is the teaching staff: 696,000 civil servants teach at general education and vocational schools. This is an extraordinarily high number, reflecting not only the scale of the German education system but also a decision that the federal states have made largely unquestioned for decades: teachers are granted civil servant status because it is considered more attractive, because it is supposed to facilitate recruitment, and because it is hardly questioned by politicians. With an increase of around 52,000 teaching positions in ten years, this sector is also the primary engine of growth.

In second place are the employees of the police, public order offices, and fire departments, with 373,000 civil servants, followed by 195,000 in the field of national defense. The tax administration employs 167,000 civil servants – the same number as ministries and central administrations. Another 126,000 work in courts, public prosecutor's offices, and the correctional system. Each of these groups has its specific justification, and no one seriously disputes that a functioning state needs police officers, judges, tax auditors, and soldiers. The question is not whether, but how many – and above all: under what conditions, with what productivity expectations, and at what cost to future generations.

The increase of 46,000 new police officer positions in ten years is initially plausible. The internal security situation, the growing importance of cybercrime, and the increased workload of authorities due to migration – all of these provide objectively justifiable reasons for more personnel. The same applies to schools, where demographic developments, inclusion, all-day programs, and language support have genuinely increased the need. Less understandable, however, is the growth of 22,000 new positions in ministries and central administrations. This area defies simple legitimacy through increased responsibilities. Here, the bureaucracy is growing for its own sake – at least in part.

Where the state actually shrank – and what that reveals

It would be dishonest to interpret the data only from one perspective. There are indeed areas where the number of civil servants has decreased over the past ten years. In the transport and communications sector, the number fell by approximately 26,000. This is not due to any political achievement, but rather the lingering effect of a decision made in the 1990s: the privatization of the German Federal Railway. Anyone who believes the state streamlined operations for efficiency reasons is mistaken. The reduction did not stem from a deliberate reform agenda, but rather as an unintended consequence of a wave of privatizations that was itself under considerable pressure and remains a subject of controversial debate. In the areas of social security, family and youth affairs, and labor market policy, the number of civil servants decreased by around 10,000 – again, not due to a conscious reform policy, but simply because the Federal Employment Agency no longer offers civil servant status.

These declines reveal something important: the state is not strategically reducing civil service positions, but rather losing them where external developments force it to do so. Where there is no privatization, no institutional reform, and no external political pressure, the civil service apparatus grows. This is not a law of nature – it is the result of a system designed for expansion, in which increasing staff in the public sector is rarely politically risky, while reducing staff almost always is.

This leads to a fundamental governance problem: The public sector in Germany is hardly subject to any serious efficiency measurement. There is no consistent review of whether government tasks actually require more staff or whether existing positions could be used more efficiently. While digitalization is touted as the solution, the reality is sobering. The eGovernment Monitor 2024 shows that only 19 percent of citizens believe that public authorities and agencies operate as efficiently as private companies. Seven out of ten, on the other hand, expect digital administrative services to be just as convenient and easy to use as private online services. At the same time, estimates have shown that consistent digitalization of the 60 most important administrative processes would offer potential savings of around 34 percent of current bureaucratic costs. What has happened: very little.

The ticking pension clock: What the state promises today and has to pay for tomorrow

Anyone discussing the growing number of civil servants without simultaneously addressing pension obligations is only telling half the story. Civil servants acquire pension entitlements during their service that differ fundamentally from the statutory pension insurance: The pension is not a contribution-based insurance benefit, but a direct payment obligation of the employer – i.e., the taxpayer. It is calculated based on the last official position held and years of service, can amount to up to 71.75 percent of the last basic salary, and is financed from the current state budget without any actual reserves being built up during active service to cover the future obligation.

The figures published by the Federal Statistical Office for 2024 are alarming: Expenditure on pensions for former civil servants amounted to €56.9 billion. Adding survivor benefits of a further €9.0 billion brings the total burden to €65.9 billion – roughly 1.5 percent of Germany's gross domestic product. The average pension at the beginning of 2025 was €3,416 gross per month, representing an increase of 5.4 percent compared to the previous year. By comparison, those who have worked their entire lives and paid into the statutory pension insurance scheme receive significantly less on average.

On January 1, 2025, there were 1,418,800 public sector pensioners in Germany – almost one percent more than the previous year. The number of pensioners at the state level rose by 1.4 percent, and at the municipal level by as much as 3.0 percent. The number at the federal level declined slightly, but this does not reflect any structural countermeasures; rather, it is the lingering effect of the privatizations of the railways and postal service in the 1990s. Between 2000 and 2020, the total number of pension recipients increased by more than 50 percent – ​​a wave of retirements primarily caused by teachers who had been hired en masse in the 1960s and 1970s due to the baby boom.

The real problem lies in the future. Calculations by the German Council of Economic Experts – the so-called "Council of Economic Advisors" – show that pension costs will rise from approximately 1.7 percent of gross domestic product (GDP) currently to 1.9 percent in 2040. The federal states, which employ nearly 70 percent of all civil servants, are particularly affected. According to the latest pension report from the Federal Ministry of the Interior, federal pension expenditures alone are projected to increase from around €6.8 billion in 2023 to €7.8 billion in 2025 and – this is the staggering figure – to as much as €25.4 billion in 2060. This represents an increase of over 50 percent compared to today. For the federal and state governments combined, the Market Economy Foundation even warns of pension expenditures reaching up to €120 billion per year by 2060, when pension levels, supplementary benefits, and survivor's pensions are taken into account.

Furthermore, there is a structural peculiarity of the civil service system: because civil servants do not pay social security contributions, they have private health insurance. Their employer reimburses a large portion of their healthcare costs through supplementary benefits. With an aging cohort of retirees and rising healthcare expenditures, not only are pension entitlements exploding, but so are the costs of these supplementary benefits. This invisible cost growth is largely ignored in many political debates – it is, in a sense, a blind spot in German budgetary awareness.

Reserves? What reserves? The German states' pension dilemma

In 2007, the federal government reacted by establishing a pension fund into which contributions are paid for all civil servants, judges, and career soldiers appointed from that point onward. The principle is simple and sensible: those who hire civil servants today should also finance their future pension costs now, so that the burden is not shifted to later generations. In theory, a reasonable approach. In practice, however, the picture is sobering.

Many German states have formally established similar pension funds – but the contributions are insufficient, the concepts are heterogeneous, and political discipline is weak. The example of North Rhine-Westphalia is particularly instructive: The most populous state, with the highest absolute pension liabilities, considered completely halting contributions to its own pension fund and instead channeling interest income from the fund directly into the state budget – to plug short-term budget gaps. Even now, North Rhine-Westphalia has to spend around 13 percent of its total state budget on civil servant pensions alone. When a state with this situation starts to misappropriate its pension fund, it's not a sign of fiscal discipline – it's a sign of panic.

The western German states as a whole now spend around 15 percent of their tax revenue on pension expenditures. This is a share that directly competes with other government priorities: investments in infrastructure, education, digitalization, and research. Anyone who ties up a fifth of their revenue with pension expenditures has less room for everything else. This is the concrete, everyday consequence of a civil service policy that was pursued for decades without sufficient consideration of the long-term effects.

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An international comparison: Too many civil servants – or too few?

Intellectual honesty is called for here. Anyone who cites the number of German civil servants as evidence of an overbearing state must be familiar with international comparisons – because they are surprising. According to OECD data, the share of public sector employees in total employment in Germany is around 11 percent – ​​significantly below the OECD average of around 17 to 18 percent. In Sweden, almost 29 percent of all employees work in the public sector, in Denmark 28 percent, and in Finland 24 percent. Even in Belgium, Poland, and Portugal, the share is higher than in Germany. On an international scale, the German state apparatus is therefore by no means particularly large when measured against the number of employees.

What does this mean? First of all, it means that the argument about the "bloated state" requires some nuance. Germany doesn't necessarily have too many civil servants compared to other countries – it has a civil service system that is structurally more expensive than that of many others. The difference lies not in quantity, but in the institutional conditions: German civil service law, with its lifelong job security, pension-based retirement benefits, supplementary benefits, and the principle of maintenance payments, creates long-term cost obligations that other countries do not generate to the same extent with their employed civil servants subject to social security contributions.

The problem, therefore, is not just the number, but the cost-benefit ratio. If Germany employs 11 percent of its workforce in the public sector and consistently performs worse internationally in digital administration than significantly smaller countries like Estonia or Austria, then the legitimate question arises: Is the taxpayer getting enough for their money? Based on all available data, the answer is: probably not. Only 19 percent of German citizens are convinced that public authorities operate as efficiently as businesses. This is a damning verdict on a system that employs millions of people and costs hundreds of billions of euros.

To make matters worse, the German public sector is aging rapidly. The proportion of employees aged 18 to 34 fell from 30 to 17 percent between 2015 and 2020 – the largest decline in the entire OECD area during this period. At the same time, 19 of the 32 OECD member states increased the proportion of younger employees in the public sector. The consequence is foreseeable: In the coming years, entire cohorts of experienced civil servants will retire, and there will be a shortage of well-trained young professionals to fill their positions. Growth alone will not solve this problem – structural attractiveness and modern working conditions are needed.

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Government spending as a percentage of GDP and the growth of the public sector

To complete the picture, the overall fiscal framework must be considered. The government spending ratio – that is, the ratio of government spending to gross domestic product – rose to 49.5 percent in 2024, 2.2 percentage points above the long-term average since 1991. The EU average in 2024 was 49.2 percent. Germany is by no means the country with the highest government spending ratio in Europe, but it is increasingly moving into a range that is economically relevant: In economic literature, serious discussions about efficiency and growth begin when the government spending ratio reaches around 50 percent. This is not because government activity is inherently bad, but because the proportion of the economy that is directed by the state eventually limits the adaptability and investment capacity of the private sector.

According to the Federal Statistical Office, the increase in the government spending ratio in 2024 is primarily attributable to higher social benefits – pensions, long-term care, and basic income. Therefore, personnel costs in the public sector are not solely responsible for the growth in expenditure. However, they do contribute to this growth on a sustained basis, and unlike cyclical social spending, they are structural – meaning they cannot be reduced by economic recovery. Every new civil servant position, every new employee position in the public sector means: higher personnel costs today, higher pension expenditures tomorrow, and less financial flexibility for the budget the day after.

While public budgets spent 7.1 percent more in 2024 than in 2023, they also took in 6.8 percent more. This sounds balanced – but this equivalence is deceptive. It masks the fact that structural expenditure obligations – pensions, benefits, personnel costs – grow regardless of the economic situation. When the economy stagnates or shrinks, as Germany experienced in 2023 and 2024, revenues collapse, while expenditures remain stable or even increase. It is precisely this asymmetry that makes the growth of public sector personnel a major fiscal risk factor.

Reform debate: What economists demand and politicians avoid

The debate about reforming the German civil service is as old as the Federal Republic itself – and as protracted as it is fruitless. Yet the reform proposals have long been on the table. Economists from the Council of Economic Experts and economic research institutes essentially recommend three measures: first, restricting civil servant status to truly core areas of the state – namely the police, judiciary, tax administration, and military; second, a gradual integration of new civil servants into the statutory pension insurance system with a supplementary company pension; and third, a consistent digitalization of public administration with the aim of achieving productivity gains, rather than circumventing them through mere staff increases.

The economist Martin Werding has proposed a deliberately gradualistic model: Only new civil servants appointed after a specific cut-off date would be included in the statutory pension insurance scheme, while existing civil servants would retain their pension entitlements. The transition period would last over 40 years – but the structural relief for state and federal budgets would be considerable. Even critical economists largely reject a complete and immediate abolition of civil servant status because the principle of maintenance is intended to promote resistance to corruption and political neutrality – thus, it has genuine theoretical reasons for the state that cannot be argued away.

But the political will to implement such reforms is virtually nonexistent. No federal government in recent decades has seriously addressed civil service law. Civil servant unions are organized and well-connected, and the affected voter groups are large and decisive in elections. In some federal states, teachers are the largest voting bloc in the public sector – and also the group that benefits most from civil servant status. When a Bavarian or North Rhine-Westphalian state finance minister considers pension reform, they are simultaneously thinking about the next election. The outcome is well known.

Saxony's Minister of Education is one of the few politicians to have opened the debate about a gradual phase-out of civil servant status for teachers – not out of ideological conviction, but out of sheer fiscal necessity. When pension liabilities consume an ever-increasing portion of the state budget, the only remaining option is this painful one. It would be better to make this decision in calmer times rather than under the pressure of the budget crisis – but that contradicts the political logic of a system geared towards short legislative terms.

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Schools, security, ministries: Where the increase was strongest

The sector-by-sectoral figures from the Federal Statistical Office provide more detailed insights. The education sector, with its 696,000 tenured teachers, saw an increase of approximately 52,000 new tenured positions over the past ten years. This rise is partly justified by objective factors: all-day schools, inclusion, language support for children with a migration background, and the expansion of vocational schools have indeed increased the demand. Nevertheless, this figure warrants attention – because with each newly tenured teacher, the respective federal state incurs a pension obligation of several hundred thousand euros, which will only begin to take effect after 30 to 40 years and then continue for decades.

Security agencies saw an increase of 46,000 new civil service positions, a figure that is not politically controversial. The internal security situation, increased border security, and heightened cybersecurity demands generally justify this need. What remains debatable is whether civil servant status is the most sensible form of employment in all security sectors, or whether flexible employment arrangements would be more efficient in some areas. 22,000 new positions were created in ministries and central administrations – and this is where the legitimacy is weakest. What justifies such a massive expansion of the administrative superstructure in a country that is simultaneously lagging behind in the digitalization of its administration? More bureaucracy as a reaction to bureaucracy is not a concept that anyone would openly defend. Nevertheless, it is happening.

What lies behind the numbers: State growth as a systemic logic

The real significance of this debate lies not in individual statistics, but in what they reveal about the systemic logic of the German state. A state apparatus that grows faster than the economy that supports it; a civil service system that generates long-term commitments on a scale no modern company would enter into; a digitalization agenda that is proclaimed but not consistently implemented; and a reform debate that has been ongoing for decades without any fundamental change – all of this is no coincidence. It is the result of institutional incentive structures that reward expansion and penalize dismantling.

The civil service is not a malicious invention. Historically, it arose for sound reasons: an impartial, law-abiding, and loyal state apparatus, not subject to the whims of political climates. The principle of adequate remuneration and job security are intended to prevent corruption and guarantee the independence of the judiciary, the tax administration, and internal security. These goals are legitimate and worth defending. The question is whether the outdated institutional design of the 19th century is still the right instrument to achieve these goals in the 21st century.

The answer from most economists is: not in this form. A reformed system that restricts civil servant status to genuine core sovereign functions, gradually integrates new civil servants into the general pension insurance system, and simultaneously creates attractive working conditions would be more cost-effective, socially just, and fiscally sustainable. It would reduce the inequality between civil servants and other public employees, which is becoming increasingly difficult to justify, especially at a time when the pension system for those covered by statutory pension insurance is under constant political pressure.

Citizens feel this inequality. They pay contributions into a pension system whose level and financial viability are constantly debated – while the retirement benefits of the civil service, financed by their taxes, are largely excluded from this discussion. This is not a sustainable basis for public acceptance of government action.

Between necessity and excess: A sober concluding reflection

The debate about the growing state apparatus in Germany requires sobriety on both sides. Those who categorically condemn all new public sector jobs fail to recognize that a functioning state has infrastructural, educational, and security-related tasks to fulfill, which create a genuine need for personnel. But those who dismiss the 15.7 percent increase over ten years—almost twice the rate of overall economic growth—as a natural and inevitable phenomenon are ignoring the underlying financial reality.

Pension costs in 2024 amounted to approximately €65.9 billion – and the wave is still rising. By 2060, pension expenditures for the federal and state governments combined could reach €120 billion per year. This is a sum that puts every serious investment agenda, every climate protection plan, every education initiative, and every infrastructure program to a fiscal stress test. It is a mortgage on the future that today's youth did not take out, but will ultimately pay for.

Germany's political class would be well advised not to dismiss the Federal Statistical Office's figures as a neutral finding, but rather to understand them as a call to action: Civil service law must be reformed. The principle of civil servant status must be limited to genuine core tasks. New pension schemes must be developed that both ensure the attractiveness of public service and are fiscally sustainable. And the digitalization of public administration must be pursued with the explicit goal of reducing personnel costs – and not merely added as an extra layer on an already growing analog bureaucracy.

The question is not whether Germany needs civil servants. The question is how many, in which sectors, under what conditions – and who will ultimately foot the bill. This answer will only become more difficult the longer it is postponed.