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|September 2019: Economic
downturn can be seen on the labour market
Unemployment figures in Germany
with other European countries, Germany seems to have low
unemployment figures. But the lack of jobs is still a
big problem as there are some German regions that have much more
higher unemployment rates than others. In contrast, there are some
sectors of the German economy where employers have difficulties to
find adequate staff.
In September 2019, approximately 2.234 million men and women were without work in Germany, a country with a population of approximately 83 million people. The number of unemployed men and women fell by 85,000 compared with the previous month and fell by 22,000 compared with September 2018. The official unemployment rate provided by the German Federal Employment Agency (Bundesagentur für Arbeit) is 4.9%. Since January 2014, the monthly unemployment rate is lower than the rate in the corresponding month a year ago. But in September 2019 the difference has shrunk to only 0.1 percentage points.
The methods used by the German employment agency are different from the standards used by the International Labour Organization (ILO). If the concept of the ILO is used, the unemployment rate is 3.2% according to the ILO standards in August 2019.
"The economic downturn continued to be reflected by the labour market in September. However, the labour market still appears to be generally robust. There was a reduction in unemployment and underemployment in September. Employment continues to grow but is losing momentum, and corporate demand for new employees declined once more at a high level", Detlef Scheele, chairman of the board of the Federal Employment Agency, says while presenting the figures for the ninth month of 2019.
there were 10,000 unemployed people more than in the previous
According to the German Federal Statistical Office, 45.380 million people were in gainful employment in Germany in August 2019 (a plus of 333,000 compared with August 2018). In July 2019, 33.35 million people had a job that was subject to social insurance contributions, the agency told (a plus of 510,000 compared with last year).
In September 2019, the Federal Employment Agency registered 787,000 job vacancies, 47,000 less than a year ago.
The underemployment was at 3.152 million people, 19,000 less than last year's September. "Underemployed" people are not only "unemployed" people but for example also persons who take part in employment market policy relieving measures or job-seekers who have a part-time work (but workers with reduced working-hours are not included).(Source: press release nr. 31/2019 of the Federal German Employment Agency of 2019-09-30).
Who is unemployed?
In Germany, a job seeking person is unemployed if she or he is able to work, does not work 15 hours a week or longer and is registered as an "unemployed" person at the local labour agency's office or job centre. The unemployed person must look for an occupation that lasts at least 15 hours a week. Further on, only a person who has not yet reached the retirement age and is not on sick leave can be "unemployed". The unemployed must be willing to work and accept any work, he or she has not the right to accept only a work that is similar to the previous one. An unemployed person who is 58 years old or more and receives welfare benefits for at least 12 months and has not got a job offer by the labour agency will not be counted as "unemployed".
Picture above: View of the Brandenburg Gate in Berlin (CC BY-SA 3.0, size reduced, author: Berthold Werner). In September 2019, the unemployment rate in the capital of Germany was 7.8%. (Source: Press release of the Regionaldirektion Berlin-Brandenburg of the Bundesagentur für Arbeit of 2019-09-30).
Picture above: The headquarters of the German Federal Employment Agency in Nuremberg. (CC BY-SA 3.0, size reduced, author: Achates).
|Two social security
benefits for unemployed persons
In Germany, there are principally two different social security systems for unemployed workers. The first one is an obligatory insurance system that includes all working persons who earn a wage of more than 450 euro a month. Contributions to the insurance against unemployment are paid by employers and employees half. In 2018, the monthly sum for this insurance is 3.0% of the monthly gross income. For example: someone gets a gross wage of 1,000 euro a month. The employee has to pay 15 euro a month and the employer too. The sum paid by the employer is additional to the gross income, the employer transfers the entire contribution to the social security authorities. For receiving unemployment money, an unemployed person must have paid contributions for at least twelve months in the last two years. The period for which unemployment money will be paid depends on the time an unemployed person has paid contributions. If someone has paid contributions for not longer than twelve months, the benefit will expire after six months, if someone has paid contributions for 24 months, the beneficiary will get this support for a maximum of twelve months. Longer periods are applicable for older unemployed men and women. The unemployment money will replace 60% of the net income of the last twelve months before unemployment (it will be 67% if the unemployed person or his or her partner cares for a child).
The other social security benefit for unemployed people is called Arbeitslosengeld II ("unemployment money 2") which has replaced the former welfare (in German: "Sozialhilfe") for those who are mentally and physically able to work. Therefore the unemployment benefit derived from the unemployment insurance system is often called "Arbeitslosengeld I" (unemployment money 1). "Arbeitslosengeld II" is being financed by the general tax revenue. For a single person, it amounts to 424 euro in 2019 or, for partners, to 382 euro for each partner. Children living with their parents receive 245 euro until they are six years old, 302 euro until 14 years and 322 euro until 18 years. Children from 18 to 25 years staying with their parents get 339 euro. Most other incomes will be taken into account with "unemployment money 2", especially child benefit (in German: "Kindergeld"). In addition, the costs for appropriate housing including heating will be covered. Both unemployment benefits will be paid if an unemployed man or woman gets only little unemployment money that does not secure his livelihood.
In September 2019, 731,000 unemployed persons were supported financially by the unemployment insurance system, 64,000 more than last year's September (Source: press release nr. 31/2019 of the Federal German Employment Agency of 2019-09-30).
|Unemployment in Europe
in recent months (according to Eurostat, the statistical
office of the European Union, seasonally adjusted)
The ways Eurostat uses for calculating the unemployment rate differ from the standards used by the German Federal Employment Agency (see below). It is estimated that 15.432 million men and women were unemployed in the European Union in August 2019. The number of unemployed persons fell by 111,000 compared with July 2019 and fell by 1.189 million compared with August 2018. The rate of 6.2% is the lowest rate recorded in the EU28 since the start of the EU monthly unemployment series in January 2000.
Younger job seekers: In the entire EU, 3.138 million young people under 25 years of age were unemployed. The average youth unemployment rate was 14.2%. The highest rates were found in Greece with 33.0% (second quarter 2019), in Spain with 32.2%, in Italy with 27.1%, followed by Sweden with 19.7%, Croatia with 19.3% (second quarter 2019), France (19.2%) and Portugal (17.6%). Czechia had the lowest rate with 5.1%, followed by Germany with 5.7% and the Netherlands with 6.9%. (Source: Press release of Eurostat nr. 145 of 2019-09-30).
the entire year 2018 in Germany
In January 2019, the German Federal Labour Agency published the unemployment figures for the entire year 2018. In that year, an average of 2.340 million persons were registered as unemployed in Germany, the average unemployment rate was 5.2% (compared with 2017: a decline of 193,000 and a decline of 0.5 percentage points). The number of those in gainful employment rose to its highest level since German reunification (44.83 million, a plus of 562,000). "The labour market in 2018 has developed very well. This is also due to the positive economic development. Particularly gratifying are the decline in long-term unemployment and the progress made in integrating refugees into the labour market", Detlef Scheele said, chairman of the Executive Board of the German Employment Agency. On average, 796,000 vacancies were registered with the agency in 2018, 66,000 more than the previous year. (Source: Press release nr. 2 of the Bundesagentur für Arbeit of 2019-01-04).
Unemployment among foreigners
Unemployment among foreigners is higher than among Germans. In September 2019, 638,000 foreigners were registered as "unemployed" which means that every fourth unemployed person is not a German (28.5%).
(Source: Statistik der Bundesagentur für Arbeit, Berichte: Blickpunkt Arbeitsmarkt – Monatsbericht zum Arbeits- und Ausbildungsmarkt, Nürnberg, Tabellenanhang zum Monatsbericht August 2019 page 46).
According to the German Federal Statistical Office, 12.2% of the German population were foreigners at the end of 2018. (Source: Press release nr. 244/19 of the German Federal Statistical Office of 2019-06-27).