The German labor market remained largely stable in July. However, the Federal Employment Agency is preparing for difficult times.
Supply chains and inflation, gas shortages and the consequences of war: Despite all the obstacles, the German labor market remained stable in July. The number of unemployed rose by 107,000 to 2.47 million, the Federal Employment Agency announced on Friday in Nuremberg.
The main reason for this is the further recording of Ukrainian war refugees in the labor market statistics. Compared to July 2021, the number of unemployed fell by 120,000. The unemployment rate was 5.4 percent, up 0.2 points from June. Without refugee migration, it would be 5 percent. For its July statistics, the federal agency used data available up to July 12.
“Unemployment and underemployment increased more sharply in July than is usual for the season,” said Daniel Terzenbach, board member of the Federal Employment Agency. This is due to the Ukrainian refugees, who were initially classified as asylum seekers, but are now included in basic security and thus appear in the unemployment statistics. “Overall, the job market remains stable despite all the burdens and uncertainties,” said Terzenbach. The labor market has been decoupled from economic development for years, he emphasized with a view to stagnating economic growth.
Seasonal rise in unemployment
A seasonal increase in unemployment in July is common because the holiday season has already begun in the first federal states, hiring is being postponed until after the summer and training contracts are ending. Without the effect of the Ukraine refugees, the number of unemployed would have risen by only about 56,000 this year – a usual increase for the time of year.
A total of more than 400,000 Ukrainians have been newly registered in Germany since February, including more than 100,000 children. Up to 80 percent are women. So far, around 26,000 have taken up work. Terzenbach assumes that this number will increase in the coming weeks and months – when language acquisition and childcare are organized and professional qualifications are recognized. “People are in the system – we can work with them,” said Terzenbach.
After all, the chances of getting a job are still high. According to the Federal Agency, 881,000 vacancies were reported in July. That is 136,000 more than a year ago. “The risk of becoming unemployed is currently lower than ever,” said Terzenbach. “We’re at an all-time low.” The general manager of the Association of German Machine and Plant Builders, Thilo Brodtmann, suggested increasing the working week to 42 hours in view of the prevailing shortage of skilled workers. “Increasing the number of weekly working hours could not only help alleviate the shortage of skilled workers. It could also help social security funds to reduce their financial problems, which are growing due to demographic development,” he said.
Federal Minister of Labor: Labor market is robust
Nevertheless, the federal agency is preparing for all possible scenarios because of the consequences of the Ukraine war, said Terzenbach. If, for example, there is a gas embargo and short-time work becomes necessary on a larger scale, this must become less bureaucratic. During the Corona crisis, the federal agency temporarily employed 13,000 people only to handle short-time work.
“We can see that the German labor market is robust, but the economic development in the coming months is associated with a high level of uncertainty, said Federal Labor Minister Hubertus Heil (SPD). “If the uncertainties lead to economic disruptions on the labor market, we will quickly come up with further labor market policy instruments react. My goal remains to get the job market through difficult times.”
The future CEO of the Federal Agency, Andrea Nahles, also told the “Spiegel”: “We are preparing!” The energy prices continued to rise, the German economy should obviously be deliberately destabilized. “I don’t think that this will leave the labor market untouched,” said Nahles.
Short-time work declining
The former SPD party leader and federal labor minister will head the agency from Monday. The previously three-person board of directors will be increased to four. In addition to Nahles and Terzenbach, Vanessa Ahuja, previously head of department in the Federal Ministry of Labor, and Katrin Krömer from Deutsche Bahn will also belong to the committee. The previous CEO Detlef Scheele is retiring, as is board member Christiane Schönefeld.
The use of short-time work has recently continued to decline, as the Federal Agency also announced. Reliable data are available until May. At that time, 328,000 people in Germany were on short-time work. With more than 2000 employees, the federal agency is still working through the short-time work peaks from the lockdown phases of the corona pandemic. At its peak, almost six million people in Germany were on short-time work.
Labor market report of the Federal Agency
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
