Structural Changes in the Ruhr Area from the 18th century until today

The economical boom in the Ruhr Area in the 18th Century

With the industrialization in Europe and the discovery of the “black gold”, how coal was called in the past, the region around the river Ruhr soon became the biggest industrial and metropolitan area in Europe, basing its success on mining, steel production and heavy industry. Even after the Second World War, in the period of reconstruction this area boomed because of the need for coal, steel and energy to rebuild the destroyed homes and industrial plants in Germany.

The coal crisis

After the German “Economic miracle” and the finalization of the post war reconstruction there was a worldwide oversupply of coal and steel, leading to a drastically decrease of prices. This made this business unprofitable in a very short time. An area with more than 5 million inhabitants at that time, specialized on mining and heavy industry for more than 150 years, lost its perspectives in just a couple of years. The triumphal march of the new “liquid gold”, the oil, at the same time speeded up this process.
In consequence, many coal mines and steel plants were closed and because of a lack of alternative sectors in the area, the state tried to avoid an economical collapse with high subsidies for coal and steel. But this led to a further delay of long overdue structural changes. Another reason was the hindrance of new branches by the very powerful montane industry, because they feared structural changes, making them a relic of the past. The area remained uncompetitive.
With the oil crisis at the beginning of the 70’s and a growing economical debt, the government could no longer afford to support the area to artificially keep the sector alive, so they slowly cut the subsidies, leading to an immense grow of unemployment.
The unemployed people had just limited chances on the labour market, because of limited education and qualification. Most of them just had eight years of school and no completed vocational education.
The government finally reacted with a “development program Ruhr”, targeting a specific settlement of growing industries in the area, supporting the further qualification of workers and founding of universities (there was not a single university in the huge Ruhr area until 1965).
This measures led to a significant improvement of the area in the 80’s, with a lot of foundations of new companies in the service sector. However, with the economical crisis after the German Reunion this process stagnated and the unemployment remained on a high level.

The situation today

Today, the process of structural change is almost completed. 55% of all employees are employed in the service sector, with a still increasing percentage. But the Ruhr area has a lot of remaining problems, resulting from the missed structural change in the 60’s. There are still a lot of former “workers families” with a low education and almost no chances to get integrated in the new labour markets. Another problem is the high rate of foreign workers that came to Germany during the boom after the Second World War and due to problems with the German language created parallel societies with almost no contact to German Citizens, the German language or education. The integration of those groups will be the hard main task for the politics in the future.

Sources:

http://www.klett.de/sixcms/list.php?page=infothek_artikel&extra=TERRA%20Geschichte%20Erdkunde%20Politik-Online&artikel_id=90629&inhalt=kss_klett01.c.218056.de

http://www.solidaritaet.com/images7/arbeitslos.jpg&imgrefurl=http://www.solidaritaet.com/neuesol/2004/44/finanz.htm&usg=__G7tms3dl_qcms-s0xo3HefiT3PA=

http://www.ioer.de/FOCUS/PDF/d_cs_1.pdf

 

Germany: Short-time Work to Prevent Unemployment in Times of Crisis

When in 2007 the financial crisis showed it’s whole seriousness, the German government introduced some measures to fight an increase in unemployment. The most drastical and at the same time highly criticized method was to support companies in Germany to employ their contracted employees as short-time workers with tax advantages, lower ensurance cost and lower wages, resulting from less working hours. This should improve the attractiveness to keep the workers employed, while taking some financial (labour cost) pressure from the companies.
But labour unions and employee representatives criticised that after the planned time of subvention by the state, the companies could easily fire the short-time workers and replace them with new ones instead of employing the old ones as fulltime workers again, resulting from the eased contracts. Additionally, it was reviewed that with a long-lasting crisis these measures would be useless and unaffordable, with the state paying twice: First with subsidies, then with social security payments.
In May 2009, it seemed as if the critics would be right. The government had to extend the subsidies for short-time workers until the end of 2010, because the economial situation did not improve as anticipated. So the costs for the subsidies were further increased and the discontend about the government’s dealing with the crisis got louder.
But suddenly, the economical situation improved in the middle of 2010 with a boom in export sales, followed by a fast growing domestic market. At that time, Germany was the only country in Europe with a recovering economy and many experts saw it as a short-term phenomenon. But especially the exporting companies had to serve the increasing demand and extended production, followed by more working hours and more employees. When the boom showed to be constant growth, the consumption morale improved and lead to a further recovery in the domestic market. This situation still continues and the unemployment rate is as low as it has not been since the German Reunification in 1990.
It is arguable, if this success was mainly due to the measures of the government or if it had a lot to do with the fact that Germany is highly dependent on exports and it benefited from the recovery of the global economies.

The attached graph shows the short-time workers in Germany in thousands. Now, in 2011 the number of short-time workers decreased almost to the level it was before the crisis.

Sources:
- http://statistik.arbeitsagentur.de/Statischer-Content/Arbeitsmarktberichte/Monatsbericht-Arbeits-Ausbildungsmarkt-Deutschland/Monatsberichte/Generische-Publikationen/Monatsbericht-201105.pdf
- http://www.reuters.com/article/2011/04/28/germany-unemployment-idUSLDE73R0QZ20110428

 

China: Economical progress and an unbalanced labour market

China’s labor market is suffering from an unbalance between high qualified jobs and low- salary jobs, driving the People’s Republic in a dilemma. On the way to a superpower, the former low-wage country wants to climb the value chain and get a producer of high-tech and high quality products. Higher wages are supposed to boost domestic consumption. This realignment creates problems, because for the top jobs, China’s new graduates often are not qualified enough. On the other hand, more and more Chinese workers do not want to do the “dirty work” anymore because of an improving standard of living.

In the labor-intensive export industries profit margins are falling short. Manufacturers of textiles, footwear and consumer electronics often only pay their workers the minimum wage, which is currently at 1120 Yuan per month (128 €) in Shanghai, in poorer provinces even lower. Although, the minimum wage increased this year by an average of 24 percent, the additional revenue, however, is relativized to a large extent by the high inflation.
In the area around Hong Kong a worker earns, on average, just 30 Yuan more than the average amount of living costs. And because the salary is barely enough to live, these jobs are unattractive, leading to about 550,000 missing workers in the area.

Most migrant workers of today were born after 1980, so after the start of economic reforms and not in the hard Mao era. They claim at least a reasonably comfortable life in the city. Some therefore avoid the traditional assembly-line career. Meanwhile, many companies complain that graduates fresh from the – such as engineers – are often not qualified enough. 27 million Chinese have graduated between 2006 and November 2010. One in five of them had not found a job six months after graduation.

 Additionally, the number of graduates exploded during the last years, from 830,000 in 1998 to six millions in 2010. This fast increase of academics cannot be absorbed by the labor market. Who has a degree of a small provincial university and comes to Beijing or Shanghai, has little chance of a good employment – especially if he lacks personal contacts in the executive department.
These developments have lead to a stagnation of the average starting salary for university graduates between 2003 and 2009; taking the inflation into account, it even decreased.

 This development will for sure lead to social, economical and political tensions in China. With a fast growing economy, people demand to be participated in this success. But how will China’s regime react?

Sources:

http://www.ftd.de/politik/international/:viele-jobs-unbesetzt-chinas-arbeitsmarkt-steht-kopf/50210178.html

http://www.economist.com/node/16693397

 

Open labour markets in Europe: Opportunity or Threat?

From the 01 May, 2011 on, the Labour market in Europe is open for the East-European member states which joined the EU in 2004: Poland, Hungaria, the Czech Republic, Slovakia, Latvia, Lithuania and Estonia. Hundreds of thousand people are expected to search for better working conditions and higher salaries in the west, especially in Germany.

 From the beginning of the month, the inhabitants of these countries can offer there labour force to employers in all member states of the EU. Largely, in Western European countries there is no minimum wage, making wage dumping very likely. Wages in the new EU countries have indeed already risen significantly since the inclusion in the European Union, but they are still nowhere near German level. Above all, because of the much lower social security and the labor shortage in these countries immigration will rise.

Good times for temporary work agencies which already have agreed co-operations between German and for example polish companies. Of course, well-trained workers needed urgently by German domestic industry to reduce labor costs are coming as well, leading to shortages of qualified workers in their countries of origin. Who then has worked a year in Germany has a right for lifelong social insurance payments by the government. The consequences have long been standard practice: lowering wages, unemployment, welfare cuts and social as well as ethnic conflicts.

There are for sure opportunities for a possible brain drain with highly qualified specialists attracted by the better economical and social situation in the west, but these situation will also lead to a lot of less qualified workers searching for benefits. And with the actual unemployment in Europe, it can be doubted that this can be compensated by the national labour markets.

 

Consequences of Globalization – The Labour Market

Through the globalization the labour market is often no longer national or regional limited, but global. The result is that the labour supply is increasing enormously. The cost of living in Asia is often only 20% of the cost of living in Western Europe. Accordingly great is the difference in wages and salaries.

In many parts of the world the factor labour is much cheaper than in Western Europe. This means that a German worker is not only in competition with other German workers, but also in competition with many workers from around the world who offer their workforce significantly cheaper. This wage gap between Western Europe and many other parts of the world means that many companies simply relocate production activities to low-wage countries. The only way to avoid the competition with millions of unqualified cheap workers is to be high-qualified.

This can be easily observed at the German labour market: While many entrepreneurs have a need for well-trained workforce, many low-skilled unemployed are on the road. These low-skilled workers can’t offer their workforce at the world market price because they wouldn’t get enough money to afford a German standard of living.

For the future it can be assumed that even higher-skilled jobs are relocated to low-wage countries. This can be seen for example at IT companies, employing programmers in India. Also in China the effort to enhance the skills of workers is high: Every year many more students from China finish their studies with a technical degree than students from Germany.

Source: http://www.globalisierung-infos.de/arbeitsmarkt.html

 

Nice job opportunities for young workers and migrants in Munich

Munich is the Capital City of Bavaria, with some 1.35 million people; it is a large city and the third largest city in Germany.

In 2010 the unemployment rate in Munich was only 4.7 % and thus below the national average. Thereby the job market in Munich has developed very positively for young workers. The number of people aged 15 to 25 registered unemployed amounted 4303 persons for the last year. All in all, it can be claimed that young people in Munich always can find a workplace without major problems. At the same time, this leads to the result that there are not enough young workers in Munich!

For people over 55 years, the labour market situation in Munich was more complicated slightly last year. Compared to 2009, the unemployment rate rose in this group of employees by 2,000 people. Accordingly, the Federal Agency for Employment provides a huge backlog and improvement in this area.

Depending on your personal skills and needs, persons with foreign citizenship are included in all offers of active employment promotion. In addition, the local “Collaborative Project Work” provides special offers for migrants. The Improvement of the German language is of particular importance; this also represents a participation in vocational training courses and is a mandatory requirement.

There are specific projects and services for people with immigrant backgrounds, with the following key aspects in 2011:

• The Use of vocational-language courses
• An intensive cooperation with the Federal Office of migrants
• Close work with the Project “Service Centre on Foreign Degrees”
• Consulting and timely manner to complete the steps required

The Employment Agency in Munich is expecting a labour shortage in 2011. The Labour Market in Munich will be determined by high demand for skilled workers this year. Thus the unemployment rate will continue to decrease. Munich hopes that the Labour Market in Munich will attract workers from outside in order to fill these vacancies.

Resources:

http://jobs.excite.de/arbeitsmarkt-munchen-aussichtsreiche-jobsuche-N16254.html

http://de.wikipedia.org/wiki/M%C3%BCnchen

www.muenchen.de/cms/prod1/mde/_de/…jobcenter/…/amip_2011.pdf

 

Global Labour Market

Amidst the Great Recession, people are finally coming to grips with the fact that the global labour force has virtually doubled in size in the last 15 years. The doubling has resulted from the increased number of persons in the global economy that results fromChina,Indiaand the ex-SovietUnionembracing market capitalism.

Having twice as many workers and nearly the same amount of capital places, creates pressure on labour markets throughout the world. This pressure will affect workers in the developing countries who had traditionally participated in the global economy, as well as workers in advanced countries. Countries that had hoped to grow through exports of low-wage goods must look for new sectors in which to advance if they are to make it in the global economy.

Looking at advanced countries,Mexico,ColumbiaorSouth Africacannot compete withChinain manufacturing, as long as Chinese wages are one-quarter or so of theirs, especially since Chinese’s labour force is roughly as productive as theirs. The entry of 1.47 billion new workers also pressures labour in advanced countries. The traditional trade story has been that most workers in advanced countries benefit from trade with developing countries because advanced-country workers are skilled, while developing-country workers are unskilled. But this analysis has become increasingly obsolete due to the massive investments that the large developing countries are making in human capital.ChinaandIndiaare producing millions of college graduates capable of doing the same work as the college graduates of theUnited States,JapanorEurope, at much lower pay.

In 2010 a shift in the monopoly was recognisable asChinagraduated more PhDs in science and engineering than theUnited States. The huge number of highly educated workers inIndiaandChinathreatens to undo the traditional pattern of trade between advanced and less developed countries. Historically, advanced countries have innovated high-tech products that require high-wage educated workers and extensive R&D, while developing countries specialize in old manufacturing products. The reason for this was that the advanced countries had a near monopoly on scientists and engineers and other highly educated workers.

Job migration is also important when looking at the global market asChina,Indiaand other developing countries have increased their number of university graduates, this monopoly on high-tech innovative capacity has diminished. Today, most major multinationals have R&D centres inChinaorIndia, so that the locus of technological advance may shift.

Unemployment and the loss of jobs in developed countries are quite commonly associated with globalisation. Some of the current trends in globalisation and unemployment are multinationals have exported jobs from developed countries to developing countries through foreign investments and outward production in special economic zones, through trade liberalisation, governments have encouraged the replacement of domestically produced goods with goods produced abroad, the increased application of technology, especially in globally operating companies, can reduce the use of and dependence on labour and women are entering the global labour force in record numbers, but they still face higher unemployment rates and lower wages and represent 60 per cent of the world’s 550 million working poor.

 

Regional Labour Market – Fermanagh

To firstly discuss the general statistics of the county of Fermanagh, its population is 57,527.  This accounts for 3.4% of the total Northern Ireland population.  (Fermanagh had a mid-year population estimate in 2008 of 62,000.). 50.09% of the Fermanagh population is male and 49.91% female. 24.09% of the population is under 16, 62.07% is of working age and 13.84% is 65 and over. The population of the particular town in Fermanagh where I live is 13,587.

Looking at earnings in Average gross weekly earnings in Fermanagh, they are approximately £336.20 (mean) compared with the NI average of £424.60. The latest casualties of the recession come as figures went above 1,000, reflecting the fact that 44 per cent of those who joined the dole queue in Northern Ireland during the month were from the building and construction industry. This is a male dominated industry and there are now four times as many men as women in Fermanagh without a job.

The latest unemployment figures show that in December the total number of people out of work in the county went up by 46, or 4.3 per cent, to 1,105. The number of men without a job stands at 886, or 4.4 per cent of the male workforce, compared with 219 women, representing 1.2 per cent of the female workforce. The combined figures put unemployment in Fermanagh at 2.9 per cent, which is below the Northern Ireland average of 3.3 per cent.  

Furthermore, Fermanagh has one of the highest rates of business start up in Northern Ireland, evidence of a thriving entrepreneurial culture.

 

Frankfurt am Main: 29.000 new jobs – 10.000 unemployed people less

Unemployment in the boom-town? Only on the first sight it is an contradictory result. Correct is while the number of labour force from 2006 till 2010 rise about 29.000, the number of unemployed people sank only about 10.000. Frankfurt’s rise is one of the benefits above all the surrounding areas, specifically the Taunus. There is the unemployment rate so less that the political economists talk about full employment. In the Hochtaununskreis there are 4.4 percent of labour force reported as unemployed, in the Main-Taunus-Kreis 4.9 percent. The jobs in Frankfurt und the people out of work: it does not fit.

On the on hand only the service sector growths in Frankfurt. That are not only, but in a considerable volume, jobs that require a good qualification. But on the other hand on Frankfurts unemployed peoplo dominate who are not qualified for management positions or high-qualified jobs. From the 27,200 women and men that were registraited on february in the employment agency not less than 16,600 had no job training. 8,200 were classified as long-term unemployed. In the neighbourhoods in Frankfurt along the Main river there are most people who are out of work: in Griesheim, Höchst, Nied, Gallus and Fechenheim ,also in Bonames and Sossenheim. In these areas, immigrants are spread very enormous. This is a reason of the high unemployment rate in comparison with the other part of Frankfurt, the northern part, like Nordend, Kalbach, Eschersheim, Nieder-Erlenbach and Harheim, they are nearly on the niveau of the Taunus area.

Quelle:  http://www.faz.net/s/RubBEFA4EA6A59441D98AC2EC17C392932A/Doc~E71F69138CDBD4361BDCE293965C66538~ATpl~Ecommon~Scontent.html

 

Albania: Ten thousands of children have to work

On a conference in Tirana, the capital of Albania, the International Confederation of Free Trade Unions (ICFTU) presented a new study about child labour in Albania together with its two albanian member unions, the KSSH and the BSPSH. The study demonstrates that child labour is still a big problem in Albania. Every day ten thousands of children have to work there, instead of going to school. Primary, they work in industries like agricultures, the shoe- and apparel industry (especially for western european companies), they sell bits and bobs on the streets (like cigarettes and chewing gums), they wash cars and help to recycle waste. Poverty, caused by a high unemployment rate and low wages is not the only reason for child labour in Albania. Many migration flows inside of Albania influence the education system, on top of that the awareness for the necessity of a school education have decreased in some demographic groups. Inadequate control mechanisms for the laws of school attendance and against child labour are additional factors which facilitate the problem, likewise broken families and prejudices against minorities. The conference in Tirana took place in the context of a global trade unions campaign against child labour. Worldwide 250 million children have to work.

Quelle: http://www.oegb.at/servlet/ContentServer?pagename=OEGBZ/Page/OEGBZ_Index&n=OEGBZ_5.2.a&cid=1097648410609