The first signs that Germany‘s labor market was feeling the effects of the economic downturn came in early January, when it became clear that unemployment had ticked upwards after years of trending in the other direction. Now it looks like the German economy has begun shedding jobs in earnest.
Federal Labor Agency head Frank-Jürgen Weise announced that unemployment shot up in the first month of 2009 by almost 400,000, to a total of 3.489 million. The new jobless number means that 8.3 percent of Germans, up from 7.4 percent, are now out of a job. Equally concerning, the number of jobs paying into Germany‘s social security system dropped for the first time in three years, by 105,000.
Berlin has extended a program whereby the government takes over a large portion of social security payments from companies should they opt to introduce shorter working hours for employees instead of laying them off. Known as “Kurzarbeit,” the program is valid for 18 months, the hope being that, by then, the economy will be looking up and companies will be able to once again fully employ their workers. (c.f. Spiegel article “Germany’s Gloomy Labour Market Future”, 30.01.2009)
I think that “Kurzarbeit” will just slow down the effects of the crisis. From the long-term perspective I think that “Kurzarbeit” is no solution for avoiding unemployment. From my perspective it would be more useful to invest in trainings where unemployed people were reskilled to jobs which are understaffed in Germany.