Is my job still safe? The effects of the economic crisis

Thyssenkrupp wants to cut 5,000 jobs, ZF Friedrichshafen 14,000, Ford almost 3,000, and Schaeffler as well. And if Esprit closes all branches, the approximately 1,300 employees there will no longer be needed. You can feel anxious and anxious when you read the economic news of the last few weeks and months. Complaints about the shortage of skilled workers seem to have given way to job cuts everywhere. Should we be worried about mass unemployment during this crisis? And whose jobs are particularly at risk?

In general, it can be said: The ongoing economic crisis is also dampening the labor market, the number of unemployed has been growing since mid-2022. Now in November it rose by 168,000 to 2,774,000 compared to November 2023. The unemployment rate is therefore 5.9 percent. Economists assume that the number of unemployed could even rise to over three million in winter. But: The unemployment rate was at a very low level before that. It is still rather small for the extent of the crisis. And: The job cuts, which are announced on a large scale, are not always accompanied by layoffs; in some cases they are also regulated through early retirement or the expiration of fixed-term contracts.

Labor market economist Enzo Weber also confirms this: “The number of layoffs is not as high as one might think.” Weber explains this primarily by saying that we come from a situation in which workers were scarce. “That’s why the downturn doesn’t lead to mass unemployment,” he says. In some cases the demand is still very high. This is also because many baby boomers are still leaving the job market because they are retiring.

But it really depends on which area of ​​the economy you work in. The industry, construction sector and trade in particular are currently cutting jobs. As a result, many people in temporary employment agencies also lose their jobs. At the same time, other sectors are still hiring, especially nurses, teachers and educators. This means that the unemployment rate is still within limits.

But vacancies in kindergartens and hospitals don’t help the salesperson or the painter. “The main problem is that there are fewer new jobs being offered than ever before,” says Weber. “Unemployed people have a really hard time getting jobs.”

In this uncertain phase, many companies are taking a cautious approach instead of investing in new jobs. It is difficult to find a job during this time, especially for people with low qualifications. The numbers of long-term unemployed and unemployed low-skilled people are significantly higher than before Corona.

Weber still doesn't advise mechanical engineers and industrial workers to train as nurses now, but believes their chances for the future are not too bad: "Many of those who lose their jobs in industry are needed with their expertise in the transformation. " So they don't have to give up their job, but rather develop further for new applications. This requires government support for further training, but also more investment in future technologies.

For the next three months, Weber's Institute for Labor Market and Occupational Research, the research institute of the Federal Employment Agency, is not expecting things to calm down for the time being. The labor market barometer combines prospects for unemployment figures with prospects for employment development (i.e. how many people are in work). After things quickly picked up again after the Corona downturn, things are getting worse and worse. But Weber doesn't think it's a given that things will stay the same. That depends largely on whether new industries emerge in Germany that will be competitive in the future.

By the way: Salaries develop lagging, which means they only react late to economic developments. Many recent salary agreements now take into account the high inflation of recent years. Many people currently earn more in real terms than before. In the current collective bargaining, however, you can see that the crisis has also reached there. It is therefore quite possible that the crisis will not necessarily affect people through job loss, but rather through low salaries.