German Labor Market Remains Stable in These Tough Times
After registering a record low unemployment rate in the pre-Covid-19 era the German labor market is trying it’s best to stand it’s ground and sail through these tough times
It’s a commonplace knowledge that, the Covid-19 crisis had hit the world economy real hard and Germany is not an exception. But despite the pandemic the German economy and the labor market seem to be coping up really well. This idea resonates with a recent article posted by DW, only a couple of days back: DW: German labor market remains stable despite lockdown pressures.
According to the official data released on 5th January 2021 by the BA Federal labor agency, Germany’s labor market had remained stable in December 2020. These figures were published ahead of a decision by the country’s federal and state leaders to extend a nationwide lockdown until mid-February.
During December, the government had ordered most of the nonessential businesses to close over the Christmas period, which prompted the employers to tap a state scheme that allows them to slash working hours and avoid layoffs.
From the official report of the BA federal labor agency, it is seen that the seasonally adjusted jobless rate in Germany stood at 6.1% in December, which was the same as in November too, after falling for the three previous consecutive months. Unemployment fell by 37,000 people, seasonally adjusted, to 2.7 million, although the figure is still nearly half a million higher than in December 2019. The BA data also said another 660,000 people were placed on short-time employment between December 1 and 28.
But there is indeed some catching up to do, according to ING bank analyst Carsten Brzeski:“The rising number of short-time workers, as well as the longer-term impact from the ongoing second lockdown and a high risk of insolvencies in 2021, clearly argue against too much optimism” . Exports are expected to pick up considerably. According to the DW report, should the global economy really expand by 4.2% next year as forecast by the OECD, some of that growth will no doubt be generated in the German engineering and automotive sectors and a couple of other industries. And also, many billions from the various government aid programs have to be spent on a number of infrastructure projects including the expansion of fiber-optic high-speed internet, the improvement of the road and rail networks, and digitization. But it’s true that in the post-pandemic era, not everything will be rosy. Not everyone in the hospitality sector and not every small shop owner will survive the pandemic. The number of corporate insolvencies will increase sharply. But let’s hope that the number of people losing their jobs or going bankrupt stays on check. Germany had tackled the first wave really well and the introduction of schemes like short-term works it tried to keep the unemployment rates at bay.
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Please stay motivated in these tough times and as always, happy to help!
