Germany: partial unemployment on the rise (in brief)

According to a survey by the Munich-based research institution, the Ifo Institute for Economic Research, 8.5% of companies are now resorting to partial unemployment measures, making this the highest level since 2013. In 2018 only 2.6% of companies had resorted to such measures, while the percentage in 2017 was only 0.4%. Alongside this Ifo notes that the larger companies have been announcing job shrinkage programs. Deutsche Bank is expected to soon announce planned job cuts of between 10,000 and 20,000, and Volkswagen has been carrying out its 20,000 jobs elimination program since 2017. Both BASF and Siemens are also talking of eliminating several thousand jobs. From the many contributory factors the most striking include the consequences of various US-driven trade wars, and a global slowdown in industrial production that is directly impacting the domestic economy. As evidenced by the Volkswagen jobs plan, the increasingly significant effects on employment of technological change, and especially the shift to the production of electric vehicles is starting to be felt early, with experts estimating some 100,000 jobs overall will disappear as a result. In spite of this no German specialists is expecting any real change in the nation’s employment trend nor any significant uptick in unemployment IFO researcher Timo Wollmershäuser, also recalls that “partial unemployment is used when companies find themselves in difficult circumstances but do not want to completely eliminate positions as they are expecting an upturn in business.” According to the Federal Employment Agency the number of partially unemployed is currently 44,000 up from 13,000 in 2018. At the height of the 2009/2010 economic crisis, Germany had almost 1.5 million partially unemployed.