The Labour Market In Germany - Statistik der Bundesagentur für Arbeit

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The Labour Market In Germany - Statistik der Bundesagentur für Arbeit

The labour market

in Germany

Report on the labour market 2008-2009

A year of crisis

for the German labour market


Published by:

Zentrale

Arbeitsmarktberichterstattung (SWA 3)

Regensburger Straße 104

90478 Nürnberg

Contact for enquiries:

Silke Delfs

Jan Vollmer

Judith Wüllerich

Telephone: 0911 179-1071

Email: arbeitsmarktberichterstattung@arbeitsagentur.de

This brochure is available on the internet at the following website:

http://www.pub.arbeitsagentur.de/hst/services/statistik/interim/arbeitsmarktberichte/berichte-broschueren/arbeitsmarkt.shtml

Further detailed information on the labour market may be found in the analysis reports (in the German

language) at:

http://www.pub.arbeitsagentur.de/hst/services/statistik/interim/analytik/reports/zentral.shtml

Recommended form of citation

Bundesagentur für Arbeit, report on the labour market: the labour market in Germany – a year of crisis

for the German labour market, Nuremberg 2009. As of November 2009.

2


Table of contents

1. The global economic crisis and the German labour market 5

2. Development of employment (including employment subject to social insurance contributions) 5

2.1 Development of employment 5

2.2 Impact of the crisis on employment subject to social insurance contributions 5

2.3 Impact of the crisis by branch of industry 6

3. Development of unemployment 8

3.1 Unemployment by areas of jurisdiction 8

3.2 Movement in the labour market in spite of the crisis 8

3.3 Regional effects of the crisis 9

3.4 Affected categories of the work force 9

4. Economic short-time working in Germany 11

5. Development of the demand for labour 13

6. The German labour market: an international comparison 14

7. Outlook 15

Table of figures

Fig. 1: Total employment subject to social insurance contributions plus employee leasing (temporary

employment)

6

Fig. 2: Employment rates in the car and metal industries 6

Fig. 3: Development of employment subject to social insurance contributions by branch of industry

and working hours

7

Fig. 4: Unemployment – seasonally adjusted figures 8

Fig. 5: Unemployment by jurisdictional agency 8

Fig. 6: Impact of the crisis by branch of industry 9

Fig. 7: Change in the unemployment rate in the last year plus the unemployment rate for October

2009

9

Fig. 8: The economic crisis – who has been worst affected? 10

Fig. 9: Number of people in short-time working plus those receiving state short-time income benefit

(German abbreviation Kug) in accordance with §170 of the German Social Code (German

abbreviation SGB III)

11

Fig. 10: Regional development of impact by employment office (German abbreviation KugL-rate) 12

Fig. 11: Relative impact of short-time working by branch of industry 12

Fig. 12: Job index (German abbreviation BA-X) of the Bundesagentur für Arbeit (German abbreviation

BA)

13

Fig. 13: The unemployment rate – an international comparison including last year’s figures as an

overwiew

14

3


A year of crisis for the German labour market

A year of crisis for the German labour market

► Since autumn of 2008 the global economic crisis has been sharply felt in the labour market

statistics – particularly in the area of short-time working, although its effects are also notice-

able in the figures for employment subject to social insurance contributions as well as unemployment.

The recession has since left its mark on the German labour market, although the economic

data shows that the effects of the crisis on employment (including employment subject to

social insurance contributions), as well as on unemployment, have in fact been relatively

moderate and overall markedly less than had been expected at the beginning of the year.

► Export-driven industries and those regions supplying the manpower for them have been

particularly hard hit by the crisis. In addition, the crisis had an early and strong impact in the

area of short-time working.

The unemployment rate increased particularly sharply at the beginning of the year – as reflected

in the figures for unemployment insurance, although the figures have since settled

down again.

There was a marked rise in the levels of unemployment amongst younger persons and

males as well as in the regions of Western Germany.

The high level of short-time working is one of the decisive factors for the hitherto relatively

mild impact of the economic crisis on the labour market in Germany. This was especially the

case in the western and southern areas of Germany. The metal and engineering sectors as

well as the car and electrical industries were especially affected.

The demand for labour – a classic early indicator of the labour market – had already started

to weaken much earlier, the first signs appearing in 2007. Currently the demand for labour is

stagnating at a low level.

The German labour market has so far coped with the global economic crisis relatively well

compared with other countries. There has been only a relatively moderate rise in unemployment.

In spite of the current stabilisation of the economic situation individual early indicators point

to a probable unfavourable development in the labour market – particularly in the coming

year.

4


A year of crisis for the German labour market

1. The global economic crisis and the German labour market

Since autumn of 2008 the global economic crisis

has been sharply felt in the labour market statistics

– particularly in the area of short-time working,

although its effects are also noticeable in

the figures for employment subject to social

insurance contributions as well as

unemployment.

Although the recession has left its mark on the

German labour market, the economic data

shows that the effects of the crisis on

employment (including employment subject to

social insurance contribitutions) and

unemployment has in fact been relatively

moderate and overall markedly less than had

been expected at the beginning of the year.

At the moment the German economy has

regained its stability. The economic early

indicators – such as the ‘new orders received’

and the ifo Business Climate Index – are moving

upwards. On the other hand the level of

production has fallen well below that of last year.

This, plus the fact that over one million

employees are on short-time working, are the

risks that the German labour market is faced

with going into the second year of the crisis.

2. Development of employment (including employment subject to social insurance

contributions)

The slump in the economy has so far had a relatively

moderate impact on employment – including

employment subject to social insurance contributions.

2.1 Development of employment

According to data provided by the Federal Statistical

Office there has been a fall in seasonally

adjusted employment - notably in autumn 2008

and spring 2009. The second half of 2009 has

seen a weakening of this development, and in

fact in September – the most recent month for

which figures are available – there was even a

modest seasonally adjusted increase in employment.

In September there were 40.55 million people in

employment in Germany – 104,000 less than a

year ago. The employment levels therefore remain

below the figures for this time last year for

the fourth successive month. At the same time

the development in the individual employment

categories has not been the same: while the

numbers of employees (people in employment

subject to social insurance contributions), selfemployed

and those in casual employment has

fallen, the number of those in marginal employment

has increased. 1

2.2 Impact of the crisis on employment

subject to social insurance contributions

The beginning of the year saw a fall in employment

subject to social insurance contributions –

the sharpest decline occurring from February to

May 2009 (with a monthly average drop of

38,000). The summer months saw a weakening

of this trend. The latest data available (for August)

actually reveals a seasonally adjusted increase

in employment. As these are extrapolated

figures, they may not be entirely accurate,

1 See the English language monthly report for October 2009 at:

http://www.pub.arbeitsagentur.de/hst/services/statistik/interim/arbeitsmarktberichte/mona

tsamb-engl.shtml

5


(cf. figure 1). The coming months will show whether

the development has been stabilised.

Seasonally adjusted decline in short-time working

since the first half of 2008

Total employment subject to social insurance contributions plus

employee leasing (temporary employment)

Germany

Aug 2003 – Aug 2009

28 mio

27 mio

26 mio

Employee leasing subject to social insurance

contributions (seasonally adjusted)

Total employment subject to social insurance

contributions (seasonally adjusted)

25 mio

0

Aug 03 Aug 04 Aug 05 Aug 06 Aug 07 Aug 08 Aug 09

source: statistitcs of the Bundesagentur für Arbeit / employment statistics

According to the latest statistics from August

there were 27.55 million people in employment

subject to social insurance contributions.

This was 139,000 less than in the same month

last year, and thus has remained below last

year’s level since May. The crisis has had a particularly

big impact on employment levels in the

southern federal states of Baden-Wuerttemberg

and Bavaria. However, North Rhine Westphalia,

Saarland and Thuringia have also been affected.

Employment rates in the car and metal industries*

800,000

600,000

400,000

200,000

Employment subject to social insurance contributions in the car, engineering, metal production /

processing, rubber and plastics industries

Germany

30.06.2008

Total: 3,258,000 employed

Employment ratio**: 11.9 %

* Rubber, plastics, metal production / processing and engineering industries

** Employment ratio: proportion of employed in the above sectors taken together in relation to total work force in employment agency district

source: statistics of the Bundesagentur für Arbeit / employment statistics

Employment ratio (in %)

under 4

from 4 to under 8

from 8 to under 12

from 12 to under 16

from 15 to under 20

20 and over

A year of crisis for the German labour market

In the northern federal states employment levels

are actually higher than for the previous year (cf.

figure 2). The main reason for this development

is the high concentration of

workers engaged in the export-driven

metal and car industries, engineering

as well as the rubber and plastics industries

in southern and western Germany.

2.3 Impact of the crisis by

branch of industry

The economic crisis has had a differing

degree of impact on the branches

of industry. There was a big decline in

employment in the manufacturing in-

figure 1

dustries, employee leasing (temporary

employment) - see below, transport and logistics

and the fields of information and communications.

In contrast, the areas of education as well

as child, health and social care have registered

continuing sharp rises in employment - not least

as a result of structural change and political decisions.

The hospitality industry (hotels and catering)

has also been unaffected by the crisis (cf.

figure 3).

The impact of the economic crisis on time-work

was early and pronounced. Just as time-work

acted as the driving force for employment

in the previous upturn in the

economy – reaching its peak in July

2008 with a total of just under 720,000,

its reaction to the downturn was

equally dramatic. The seasonally adjusted

fall in this sector even started in

the second quarter of 2008 - i.e. several

months before the decline in overall

employment subject to social insurance

contributions (cf. figure 1). The

fall in time-work was particularly sharp

in Baden-Wuerttemberg, Bavaria,

Rhineland-Palatinate and Thuringia. 2

figure 2

2 See the German brochure “temporary working – current developments“

6


Development of employment subject to social

insurance contributions by branch of industry and

working hours

Comparison over the last year August 2009 /

August 2008

Other

Child care and education

Health and social

care

-222,000

-125,000

-66,000

-412,000

source: statistics of the Bundesagentur für Arbeit

+273,000

+95,000

+47,000

+131,000

Manufacturing

industry

Services of

general interest

Other

-350,000

Part-time

Full-time

The level of employment for Germany as a

whole in June 2009 was nearly 175,000 (-25.6

percent) below last year’s figures. The development

has since stabilised. The current data

available (up to August) signalises a minimal

seasonally adjusted upward trend, but must be

treated with caution due to the uncertainties involved

in the extrapolation methods used.

Part-time employment subject to social insurance

contributions has been increasing for years

and has been the main factor in this crisis in

avoiding an even worse decline in overall employment

subject to social insurance contributions.

According to provisional estimates

350,000 full-time jobs have been lost compared

with the figures from last year (data available

from August), while part-time employment has

actually increased by 210,000 in the same period.

http://www.pub.arbeitsagentur.de/hst/services/statistik/000100/html/sonder/Zeitarbeit_in_

Deutschland-Aktuelle_Entwicklungen.pdf

+210,000

A year of crisis for the German labour market

figure 3

7


Unemployment – seasonally adjusted figures

Germany

January 2007 to October 2009

3. Development of unemployment

A year of crisis for the German labour market

concentrated in the jurisdictional area

of unemployment insurance – SGB III

(German abbreviation) (cf. figure 5).

Seasonally adjusted unemployment has been on

the increase since November 2008 (cf. figure 4),

even if only relatively moderately when

seen in the light of the difficult economic

situation. From January to April

2009 there was a relatively sharp increase

in seasonally adjusted unemployment

(monthly average +56,000),

while since July there has been only a

modest seasonally adjusted increase.

These figures, however, take into account

the “special effect” resulting from

the changeover to the new political

instruments put in place for the labour

market. 3 Unemployment here increased in October

by 21 percent (+188,000) com-

4 mio

3 mio

2 mio

compared to

previous

year:

+241,000

pared to the figures for October 2008.

In the area of basic social security

(German abbreviation SGB II) the increase

was only 2 percent (+44,000) in

comparison. The particular increase in

1 mio

the area of SGB III (unemployment

insurance) is the result of the high

0

number of new cases of unemploy-

Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09

source: statistics of the Bundesagentur für Arbeit

figure 4 ment (through job losses) against the

relatively small number of cases of people returning

to work (after unemployment).

Unemployment by jurisdictional agency

Germany

January 2007 to October 2009

4 mio

Compared

to previous

3 mio

Basic social security (SGB II)

year

+44,000

2 mio

Unemployment insurance (SGB III)

+188,000

1 mio

Without this “special effect”

there would merely have been a light

0

+232,000

monthly rise during the summer (ca.

+10,000 to +15,000).

Jan 07 Jul 07

source: statistics of the Bundesagentur für Arbeit

Jan 08 Jul 08 Jan 09 Jul 09

figure 5

3.1 Unemployment by areas of jurisdicti-

3.2 Movement in the labour market in

spite of the crisis

on

Even in difficult economic times there is still

If the development is considered separately in

the two areas of jurisdiction, it becomes clear

that the increase in unemployment was mainly

movement in the labour market. Thus 3,26 million

people registered as unemployed through

losing their job from November 2008 to October

2009 473,000 (17 percent) more than in the

3

see the German language monthly report of the Bundesagentur für same period before the crisis. In the same pe-

Arbeit, section V.1 general statistical information

riod, however, 3.2 million deregistered from un-

http://www.pub.arbeitsagentur.de/hst/services/statistik/000000/html/start/monat/aktuell.p

df

8


employment to take up new work, almost

170,000 (5 percent) less than a year ago.

Impact of the crisis by branch of industry

Number of new job losses per branch as a proportion of all branches in % (plus

change in number of new job losses compared to the previous year in %)

Germany - October 2009

Manufacturing

17.0 -53.7

Employee leasing (German abbreviation ANÜ)

15.7 +39.0

Trade; vehicle maintenance and repair

13.2 +0.7

Economic services without employee leasing (ANÜ)

12.0 +15.9

Construction

10.6 +0.7

Transport and storage

6.4 +11.6

Hospitality industry (hotels and catering)

6.2 +23.7

Health and social care

5.4 -0.5

Other services, private households 3.7 +4.7

Information and communication 2.5 +6.7

Child care and education 2.0 +0.2

Public administration 1.6 -4.5

Agriculture and forestry, fishing 1.6 +4.3

Financial and insurance services 1.0 +13.6

Mining, energy and water management 1.0 +15.9

source: statistics of the Bundesagentur für Arbeit

3.3 Regional effects of the crisis

In spite of the deep recession there has been

only a modest rise in overall unemployment –

from 7.2 percent in October 2008 to 7.7 percent

in October 2009 covering the year of crisis. Regions

with export-driven manufacturing indus-

4

see the German language methodological report of statistics “2009/09

– distinguishing new cases of unemployment by branch of industry /

Differenzierung des Zugangs aus Erwerbstätigkeit nach Wirtschaftszweig”

at:

http://www.pub.arbeitsagentur.de/hst/services/statistik/000200/html/methodenberichte/m

ethodenpapier_zugang_et_wz_200909.pdf

A year of crisis for the German labour market

tries have been worst affected by the crisis.

Thus the rise in unemployment in southern and

western Germany was correspondingly

early and sharp. Eastern Germany

was less affected by the worsening

economic situation, although on a regional

comparison it still has a far

greater problem with its labour market

than southern and western Germany.

(cf. figure 7).

Nearly one in five of the new cases of

unemployment since autumn 2008 is

from the manufacturing industries,

followed by people in time-work (16

percent) and then those in the trade

and commerce sectors (13 percent)

(cf. figure 6). 4 Change in the unemployment rate in the last year

plus the unemployment rate for October 2009

Change in the last year Unemployment rate

Neubrandenburg -8.8%

The bulk of the rise in

Eberswalde -12.7%

unemployment is therefore attributable

to the manufacturing industries and

time-work (+54 percent and +39 percent

respectively compared to the

Cottbus -9.9%

Donauwörth 3.1%

Göppingen +53.6%

same period last year). It is probable

Memmingen +67.8%

Rottweil +70.3%

Change in the last year in %:

that the seasonally adjusted increase

in unemployment since the end of

Germany: +7.7%

source: Statistics of the Bundesagentur für Arbeit

under -5.0

-5.0 to under 5.0

5.0 to under 15.0

15.0 to under 25.0

25.0 and over

Germany: 7.7%

2008 will come mainly from these two sectors.

figure 6

Berlin Mitte 14.5%

Sangerhausen 15.5%

Ingolstadt 2.9%

Freising 2.9%

Altenburg 14.4%

Unemployment rate in %:

unter 3.0

3.0 to under 6.0

6.0 to under 9.0

9.0 to under 12.0

12.0 and over

figure 7

3.4 Affected categories of the work force

Development of male and female unemployment

The main victims of this economic slump have

been male (cf. figure 8). Thus the percentage of

unemployed males as a proportion of unemployed

overall has risen four percentage points

in the last year to 54 percent. The reason for this

is that men are more often employed in sectors

of the economy that are particularly susceptible

9


to the economic crisis. Thus the proportion of

male employees in the metal industry is about

88 percent and in engineering 84 percent. Women

tend to be found more in the service industries

where demand is less dependant on economic

trends – e.g. child care and education (66

percent women), and health care (where actually

80 percent are women). In the last year

male unemployment has increased by 16 percent,

whereas female unemployment has fallen

continually. A sharp rise in male unemployment

at the beginning of 2009 resulted in larger increases

– compared to the figures for the same

period a year ago – for each month since then

until peaking in August 2009 at 18 percent

higher than in August 2008. Since then it has

been on the decline. Female unemployment, on

the other hand, has continually fallen – compared

to the same time a year ago – during the

whole period of the crisis, albeit by diminishing

amounts. 5

The economic crisis: who has been most affected?

Unemployment compared to a year ago by category of work force in (change in %)

Germany

October 2009

Total

Males

Females

15 to under 25 years

of which 15 to under 20 years

50 years to under 65 years

of which 55 years to under 65 years

Foreigners

Germans

Severely disabled people

source: Statistics of the Bundesagentur für Arbeit

5 see the German language brochure “women and men in the labour

market / Frauen und Männer am Arbeitsmarkt” at:

http://www.pub.arbeitsagentur.de/hst/services/statistik/000100/html/sonder/broschuere_f

rauen_maenner_2009.pdf

-1.2

-0.5

3.5

7.7

7.6

7.6

8.1

11.5

14.1

15.9

A year of crisis for the German labour market

Development

young people

of unemployment amongst

The crisis has had a strong impact on young

people. The youth unemployment rate has been

higher than in the same period a year ago since

February, whereas this didn’t occur with the

overall unemployment rate until March. In October

2009 the unemployment rate for under 25year-olds

stood at 12 percent above the previous

year.

In interpreting the unemployment statistics of the

various age groups, it has to be taken into account

that at the end of 2007 the various early

retirement schemes then existing were discontinued.

Prior to that date these schemes had

reduced the unemployment rate amongst older

people. 6 Therefore a comparison of this age

group’s rise in unemployment with the previous

year’s figures would not be meaningful at present.

The economic downturn has particularly

affected young males, with 19

percent more unemployed than a year

ago. On the other hand, the impact on

young females – as is the case with

females generally, has been below

average, with only a three percent

increase in unemployment.

figure 8

Similarly the impact on young people

in western Germany has been far

stronger than those in eastern Germany,

with youth unemployment in the

west rising by around a fifth, whereas

for the eastern part of the country it

has actually continued to fall.

6

Details: the regulations according to § 428 SGB III (unemployment

benefit under simplified conditions for employees aged over 58), § 65

section 4 SGB II (corresponding application of § 428 SGB III for job seekers

eligible for basic social security) and § 252 section 8 SGB VI (credited

periods for insured persons over 58 without work).

10


The rise in youth unemployment is more strongly

reflected in the figures for the area of unemployment

insurance (SGB III) with +16 percent

than in the area of basic social security (SGB II)

with only +8 percent. There are several reasons

for this sharp impact on young people. Firstly, it

is far more common for young people, just starting

on a career, to be given fixed-term contracts

of employment than is the case with older employees.

In times of crisis many of these contracts

are not extended, thus duly contributing to

youth unemployment. Secondly, social criteria

for selecting employees for redundancies will

tend to affect young people first. This has especially

been the case for the 20-25 year-old age

group as a result of the crisis. The summer of

2009 saw a rise in unemployment for this age

group of 15 to 20 percent compared to last year,

whereas the figures for the under 20 age group

Short-time working is one of the key factors in

the hitherto relatively mild impact of the global

economic crisis on the labour market in Germany.

The state short-time working allowance

A year of crisis for the German labour market

actually declined (-1 percent in October 2009

compared to October 2008). This was due in no

small part to the educational and training possibilities

open to them, thus avoiding becoming

unemployed.

4. Economic short-time working in Germany

Fall in notifications for short-time working – state

assistance remains at a high level

Number of short-time workers (§170 SGB III) and those in notifications for state shorttime

income benefit (§170 SGB III)

Germany

June 2008 - October 2009

1,600,000

1,200,000

800,000

400,000

Number of short-time

workers (§170 SGB III)

0

Jun 08

source: Statistics of the Bundesagentur für Arbeit

Dec 08 Jun 09

Number of workers in

notifications for state

short-time income benefit

(§170 SGB III)

* provisional

*)

has led to jobs being saved, and redundancies

– and thus unemployment

– avoided. 7

In order to receive the short-time working

allowance, notification of the expected

loss of working hours is required.

From autumn 2008 to spring

2009 there was an extremely sharp

rise in the number of notifications of

short-time working (cf. figure 9), peaking

in February 2009 with 700,000

employees being affected. This trend

has since been slowly reversed, and

figure 9

was down to 89,400 in October. It appears

that the majority of companies able to

operate short-time working to alleviate the effects

of the crisis have already done so.

7

See the German language brochure “short-time working – currents

developments / Kurzarbeit – aktuelle Entwicklungen” at:

http://www.pub.arbeitsagentur.de/hst/services/statistik/000100/html/sonder/kurzarbeit_in

_deutschland_aktuelle_entwicklungen.pdf

11


A year of crisis for the German labour market

From the notifications a marked rise in the actual due to the regional economic structures. In re-

number of employees in short-time working is gions where companies or their suppliers are

also evident. According to the most recent data dependant on exports the impact of the crisis

available there were 1.416 million employees

receiving short-time working allowances in June.

has been relatively higher (cf. figure 2).

The figure for September 2008 was 39,400.

Not all the branches of industry were equally

affected by short-time working. Most short-time

In June the average loss of working hours was working occurred in the manufacturing industry

30.5 percent. The equivalent number of employ- (cf. figure 11). The worst hit relatively was the

ees - both full- and part-time – works out to approximately

432,000. Seen on this

scale, the use of short-time working

metal industry in June 2009.

has eased the unemployment burden. Workersin themetal industryrelativelythehardesthit

by short-time working

The proportion of employees in shorttime

working to all workers in employment

subject to social insurance contributions

in June 2009 was 5.2 percent

(cf. figure 10). The equivalent

proportion in December 2008 was less

than 1 percent. The figures from

southern and western Germany are

disproportionally high.

Relative impact of short-time working by branch of industry (top 5 and short-time working)

Number of recipients of state short-time working benefit plus Kug L rate * (in %)

Germany

June 2009

There are a total of 117,000 (35.3 percent) short-time

workers in the metal production industry

Metal production and

processing

Engineering

Manufacture of

metal products

Manufacture of

electrical equipment

Car industry

Short-time working

In contrast, the figures from Lower

* KugL-Quote = no. in short-time working under §170 SGB III in relation to total number engaged in employment subject to social insurance contributions on 30.6.2008

source: statistics of the Bundesagentur für Arbeit

figure 11

Saxony, Schleswig-Holstein and most of the

eastern federal states are below average, al-

Altogether in this sector there were a good

though there are exceptions here, i.e. the south-

117,000 employees engaged in short-time workern

part of Saxony, Thuringia and individual dising. The relative impact (short-time working in

trict employment offices (Arbeitsagenturen) in

the metal industry as a proportion of all employ-

the other states. These discrepancies are mainly

ment subject to social contributions in this sector)

was 35.3 percent. In the car industry

174,500 employees (21.5 percent)

Regional development of impact by employment office

(KugL rate* in %)

were on short-time working out of a

total of 813,400 employees. It was the

same disproportionate story in engi-

Nov 2008

Dec 2008

Jan 2009

Feb 2009

neering (24.7 percent) and the electrical

industry (21.9 percent).

Mar 2009

Apr 2009

May 2009

Jun 2009

* KugL rate = number in short-time working under §170 SGB III in relation to total number engaged in employment subject to social insurance contributions on 30.06.2008

source: statistics of the Bundesagentur für Arbeit

24,000

3.1

Kug L rate* (in %)

under 1.0

from 1.0to2.0

from2.0to3.0

from3.0to4.0

4.0 and over

figure 10

175,000

75,000

175,000

240,000

22.3

21.9

21.5

24.7

117,000

35.3

12


The demand for labour can be seen as a classic

early indicator of the labour market. Thus the

slackening in labour demand started early - at a

time, in fact, before the effects of the crisis on

the labour market were fully recognised. The

demand for labour had already started to fall

slightly in 2007, but initially remained at a high

level. From the middle of 2008 the demand fell

sharply and then collapsed completely at the

beginning of the year.

BA Job Index (BA-X)

Demand for labour

Germany

January 2005 to October 2009

250

200

150

128

172

100

Jan 05 Jan 06 Jan 07 Jan 08 Jan 09

source: statistics of the Bundesagentur für Arbeit

The signs are that since autumn 2009 the decline

in the labour demand has been halted and

is indeed starting to stabilise. The Bundesagentur

für Arbeit’s Job Index (BA-X) 8 – an indicator

for the demand for labour in Germany –rose

again in October by 1 percent to 125 percentage

points (cf. figure 12). The BA-X has now been

flat for five months, albeit at a low level. The gap

to last year’s level is now slowly improving.

However, there are still no signs of an end to the

decline in demand in the labour market: compared

to last year’s figures the labour demand in

October 2009 was -36 percent, following -39

percent in September, -43 percent in August, -

46 percent in July and -49 percent in June.

8

see the German language BA-X monthly report (mon. Berichterstattung):

http://www.pub.arbeitsagentur.de/hst/services/statistik/interim/arbeitsmarktberichte/beric

hte-broschueren/stellenangebot/bax.shtml

5. Development of the demand for labour

172

161

125

A year of crisis for the German labour market

It remains to be seen whether the crisis has bottomed

out prior to a rise in demand for labour or

whether the demand will for the time being remain

stuck at a low level.

According to a survey by the Institute for Labour

and Career Research (Institut für Arbeitsmarktund

Berufsforschung - IAB 9 ), in the third quarter

of 2009 there were a total of 832,000 job vacancies

in Germany – 166,000 less than a

year ago. This represents an overall

decline of 17 percent compared to the

third quarter of 2008. The sharpest

decrease was in the metal industry,

engineering, electrical engineering and

the car industry – around 60 percent

over the whole of Germany. In contrast

there were strong increases in the

area of social services and also even

in the construction industry – doubtless

due to the Federal Government’s economic

stimulus programmes. This decline

in job vacancies was confined to

figure 12 western Germany, as the effects of the

crisis on the eastern German economy, which is

less dependant on exports, have been considerably

less than in the west.

9 See the German language IAB summary report at:

http://doku.iab.de/grauepap/2009/os0903.pdf

13


A year of crisis for the German labour market

6. The German labour market: an international comparison

The global economic crisis has clearly affected

every country in Europe, albeit to very different

degrees in the individual states belonging to the

European Union. The seasonally adjusted unemployment

rate 10 than doubled within a year from 8.1 percent to

19.7 percent, closely followed by Spain with an

unemployment rate of 19.3 percent in September

2009 – a rise of 6.9 percent in the last year.

in the European Union rose Ireland, a country that had enjoyed an economic

2.1 percentage points from 7.1 percent in Sep- boom in recent years, has also suffered badly,

tember 2008 to 9.2 percent in September 2009. with a near doubling of the unemployment rate

In absolute numbers this represents an increase within the last year. In September 2009 it stood

of just under 5.1 million unemployed people in

the European Union. September 2009 saw a

at 13.0 percent (a rise of 6.3 percentage points).

total of 21.5 million unemployed in the 27 EU There were other EU countries alongside Ger-

member states.

many, in which the impact of the crisis was below

the average. The Netherlands remained

the country with the lowest

unemployment rate in Europe with 3.6

The unemployment rate: an international comparison

An international comparison of unemployment figures in %

percent in September 2009 (compared

Germany, EU 27 and selected countries

to 2.7 the year before). In Austria the

September 2008 / September 2009

20

19.3 increase was also modest, being only

0.9 percent in the year up to Septem-

15

ber 2009 to 4.8 percent

10

5

0

source: Eurostat

3.6

2.7

4.8

3.9

7.6

7.1

Compared to other European countries there

has been only a modest rise in the unemployment

rate in Germany in the last year (cf. figure

13). From an unemployment rate of 7.1 percent

in September 2008 it has increased only 0.5

percentage points in the last year to 7.6 percent.

This is due in no small part to the intense use

made of short-time working in Germany (cf.

chapter 4). The sharpest effects of the crisis on

the labour market were felt in Latvia, Spain and

Ireland. In Latvia the unemployment rate more

10

cf. Bundesagentur für Arbeit: the German language monthly report

October 2009 the labour and training market in Germany / der Arbeits- und

Ausbildungsmarkt in Deutschland, Nuremberg 2009, page 19 at:

http://doku.iab.de/grauepap/2009/os0903.pdf

5.9

7.8

8.2

6.8

Netherlands Austria Germany UK Poland EU 27 France Ireland Spain

7.1

9.2

8.0

10.0

6.7

13.0

12.4

September 2008

September 2009

The trend of falling unemployment in

recent years in Germany appears to

have been halted by the crisis. Seen in

a European perspective, however,

Germany has seen only a modest increase

in unemployment. A relative

figure 13

comparison clearly shows that the 0.5 percent

rise in unemployment in the last year is in fact

the lowest in Europe. Just behind Germany is

Belgium with a rise of 0.6 percent. The German

unemployment rate has now been below the

European average for the last year.

This comparison when applied to key economic

powers outside Europe, also shows Germany’s

performance in a relatively good light, both Japan

and the USA having registered larger relative

increases in unemployment rates in the last

year. In Japan the rate rose by 1.4 percent,

while in the USA the rise was actually 3.6 percent.

The seasonally adjusted unemployment

rate in Japan was 5.5 percent (still below the 7.6

14


percent in Germany), but in America it was 9.8

percent – higher than in Germany.

In October 2009, a good year on from the first

observable effects of the crisis on the labour

market, there are several signs of a stabilisation

of the economic situation. At the same time,

however, individual early indicators appear to

make an unfavourable development in the labour

market more likely, particularly in the coming

year.

The Institute for Labour Market and Career Research

(IAB) in its latest scenarios for 2010 anticipates

a sharp deterioration in unemployment,

forecasting figures ranging from of 3.83 million

to 4.28 million. This would mean an average

increase for the whole of 2010 of more than half

a million over the current figures.

Other institutes for economic research offer a

widely varying range of prognoses for 2010 –

from 3.9 million by the Institute for the World

Economy (Institut für Weltwirtschaft – IfW) up to

nearly 4.5 million by the Halle Institute for Economic

Research (Institut für Wirtschaftsforschung

Halle – IWH). The Federal Government’s

benchmark paper mentions figures of 4.1

million unemployed averaged over the whole of

2010. However, all the institutes for economic

research agree on one thing, i.e. the state of the

labour market will remain tense in 2010, the only

question being the size of the increase in unemployment

in 2010.

7. Outlook

A year of crisis for the German labour market

An economic prognosis presents exceptional

difficulties, as the case of short-time working

illustrates. In spite of all the financial assistance

provided by the Federal Government short-time

working still costs companies money (cf. the

summary report of the Institute for Labour Market

and Career Research (IAB) no. 17/2009).

Companies therefore ultimately have to decide

for themselves how long short-time working will

be economically viable for them. In doing so, the

following questions in particular have to be answered:

• does the situation on incoming orders look

like improving in the near future; does holding

on to the core workforce therefore make

economic sense (while taking into consideration

that short-time working tends to increase

the unit labour costs thereby cutting

profits)?

• What is cost prohibitive: making skilled

workers redundant or recruiting them again

after the crisis?

• When the crisis is over will companies find

the skilled personnel they made redundant

during the crisis (or will these skilled workers

have been recruited by other companies in

the meantime)?

15

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