Economy : Labor market stable in 2022 – focus on shortage of skilled workers

As a stability factor in difficult times – this is how the CEO of the Federal Employment Agency, Andrea Nahles, sees the German labor market. After the corona pandemic, 2022 brought several challenges with the Ukraine war, energy crisis and inflation, which left their mark on the labor market. But these were moderate given the enormous burden, she said on Tuesday in Nuremberg. “We have also seen here how the economy and the labor market are increasingly decoupling.”

In December, the number of unemployed in Germany rose by 20,000 compared to the previous month to 2.454 million due to the winter break – and was thus slightly above the annual average for 2022 of 2.418 million. The unemployment rate increased by 0.1 percentage points to 5.4 percent compared to the previous month. “The positive news for the new year is that the labor market will remain stable at the end of 2022 despite the tense economic situation,” said Federal Labor Minister Hubertus Heil (SPD).

Employment at its highest level since 1990

In December, the number of unemployed usually increases because, among other things, fixed-term contracts usually expire at the end of the year and companies hire fewer new employees in the month. Adjusted for seasonal influences, the number of unemployed fell by 13,000. For its December statistics, the Federal Agency used data that was available up to December 14th.

“It is particularly gratifying that employment has reached its highest level since reunification in 1990,” stressed Heil. According to the Federal Statistical Office, around 45.6 million people had their place of work in Germany in 2022. According to calculations by the Federal Employment Agency, the number of employees subject to social security contributions increased by around 530,000 to 34.9 million in October 2022 compared to the previous year.

There is an increase in employment in almost all federal states and sectors, explained Nahles. People without German citizenship played an important role in this. “Their share of employment growth has risen to 80 percent in recent months, so they account for the largest share of this growth,” said Nahles.

Labor market develops positively

Despite the economic uncertainty, the labor market in 2022 is better off on average than in the previous year: in 2021 the number of unemployed was 195,000 higher on average for the year. However, the consequences of the Ukraine war and the energy crisis became clear from mid-2022. For example, Ukrainian refugees caused an increase in unemployment and underemployment in the statistics, where people are recorded in measures such as integration courses. The demand for new staff also dropped noticeably – albeit at a high level.

Recently, noticeably more employees took advantage of short-time work benefits. The Federal Agency will have up-to-date data on this by October 2022. According to this, 163,000 employees received short-time work benefits in the month. From December 1 to December 28, companies reported short-time work for 91,000 employees. On average for the year, the authority estimates the number of short-time workers at around 430,000, which is significantly less than the 1.85 million in the previous year, but is still above the annual average for the pre-Corona year 2019.

“The labor market policy debate has turned around,” said Employer President Rainer Dulger, looking at the current figures. “The current challenges are no longer unemployment, but a lack of specialists and workers as well as skills adjustments for employees.” Federal Agency boss Nahles also sees the recruitment of skilled workers in Germany and through immigration from third countries as one of the central topics this year. In 2023, there should therefore also be a focus on attracting more young people to dual training, she said.