How the German government tries to reduce the unemployment

The unemployment in Germany fall from about 5 million in January 2005 to below 3 million in the November 2008. And even if the experts do not appreciate that the crisis will hit the country so bad like the United States the unemployment in Germany is rising again. In January 2009 almost 400.000 people loosed their jobs and the unemployment rate shot to a total of 3,489 million. But this fall was not only caused by the bad economic conditions which was caused by the crisis but also through the hard winter, so that in many sectors of the economy, that can only operate in good weather, companies have had to fire people.

To stimulate the economy and prevent the further rising of the unemployment numbers the German government introduced a program whereby it will take over a large portion of social security payments from companies if these companies will introduce shorter working hours for employees instead of laying them off. This program is known as “Kurzarbeit” what means short work and should valid for 18 months. During these 18 months the government hopes to defense the crisis and the economic situation will become better so that companies will be able to change from shorter working hours to full working hours and employ more.

But this “glimmer of hope” is now facing a number of critics from experts and also from journalists. “Süddeutsche Zeitung”,” Handelsblatt” and “Die Tageszeitung” are daily german newspapers and are blaming the government now to think to optimistic and say that this program will lead to more problems if the crisis will not end during this 18 months. Also the critics underline that this safety net provided by the government will also catch a high number of jobs who are reduced not due to the crisis but due to the traditional seasonal employment model. Like sectors in which it is usual have fewer workers during the winter, such as construction or touristic market. And also companies which did not plan to layoff somebody, could reduce working hours to let the government take over a part of social security payment. But if the government will stop the payments after 18 months and economy will not became better this measure will led to more unemployment. And also the forecast of the crisis time-span of 18 months is could be wrong because measurements will be seen only with delay and nobody can forecast when the crisis will finish.

Source:
http://www.spiegel.de/international/germany/0,1518,604582,00.html

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2 thoughts on “How the German government tries to reduce the unemployment

  1. I agree with the opinions of the opponents of the “Kurzarbeit” program. Actually that’s an interesting program in a short-term projection but the problem is that it had been based on the forecast that in 18 months the economical situation will be better. As you wrote, nobody can be sure of when the crisis will finish and also in which situation will be the countries, and in this case Germany, after it. In addition there is also the collateral damages caused by this program which seems to preoccupy journalists and opponents so some additional programs might be created to solve it.

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  2. I think to face the crisis it is not suffiecient to wait 18 months and hope the economy regenerates on their own. it is important that every country starts a deliberate economic stimulus package. Of course short-time work is like oil in the fire during a crisis. On the other hand it is the only possibility.

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