The sluggish economy and the refugees from the Ukraine have turned the fresh spring wind that can often be felt on the German labor market into a mild breeze this year. The number of unemployed fell by only 8,000 to 2.586 million in April – last year at the same time there was still a decline of 53,000. The unemployment rate stagnated at 5.7 percent, as the Federal Employment Agency announced on Friday in Nuremberg. In April last year it was still 5.0 percent.
Sluggish economy
“The spring revival on the labor market will remain weak in April. One of the reasons for this is the sluggish economy. Overall, however, the labor market is in stable condition,” said Andrea Nahles, Chairwoman of the Federal Employment Agency. Federal Labor Minister Hubertus Heil (SPD) spoke of a “stable labor market in an economically difficult environment”.
For its statistics, the Federal Agency used figures that were available up to April 13th. The number of vacancies also fell and, at 772,984, is 4,000 below the March figure and more than 78,000 below the April figure for the previous year.
The CEO of the Federal Agency is particularly concerned about the number of long-term unemployed. 885,000 people in Germany have been without a job for a year or longer. 59 percent of them even more than two years. 31 percent are older than 55 years. Although the highs of the corona pandemic have now been overcome, the level is still significantly higher than before the virus broke out.
Despite the high demand for skilled workers, it has become more difficult for the unemployed to find employment. “This leads to a consolidation of unemployment,” said Nahles. She called on companies to also hire people who do not match the ideal profile. “Employers have to be open to giving people a chance, even if they don’t have all the ideal requirements,” she said. Then the federal agency could also help, for example through coaching, support and, via the possibilities of the Participation Opportunities Act, also with financial aid.
Better further education than helper jobs
Minister Heil emphasized that around two thirds of the long-term unemployed had no vocational training. “That’s why it’s right that with the new citizen’s allowance we are focusing more on further training and qualifications instead of placement in helper jobs,” he said. With the second stage of the citizens’ allowance from July 1, the job centers would have “powerful tools at hand to encourage more people to start further training”.
The chief economist at the state banking group KfW, Fritzi Köhler-Geib, considers the high proportion of young people without training to be particularly worrying. 17 percent of 20 to 34-year-olds have no professional qualifications, which affects 2.7 million people. “A lack of education is still the number one unemployment risk.”
The Federal Agency attributed the significant increase in unemployment compared to the previous year in part to the inclusion of Ukraine refugees in the statistics. “Even without taking Ukrainian refugees into account, unemployment would have risen compared to the previous year, but less so,” the authority said.
Short-time work has increased slightly
Nahles dampened the hope that people from Ukraine would soon be available to the labor market in large numbers and without major restrictions. The refugees come from the integration courses with a knowledge of German, which is suitable for everyday use, but often not sufficient for greater professional demands. Nahles described the fact that the graduates of integration courses initially went back to basic security and thus received citizen income as a “normal development”.
According to the latest data from the Federal Agency, short-time work has only increased slightly again. From April 1st to April 24th inclusive, companies announced short-time work for 36,000 people – but it is not yet clear whether it will actually be used. Current data on actual utilization is available up to February 2023. According to this, short-time work benefits were paid for 162,000 employees this month, around 21,000 more than in January.
Nahles assumes that funds of up to one billion euros provided for short-time work in the household can be saved over the course of the year. In this case, the Federal Agency could start again to build up its reserve, which has been reduced to zero.
