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Despite the closure and unclear future: In the second lock – the economy there is almost no redundancies

Thanks to huge government interventions, the Coronian year was milder than feared. In 2020, there were on average about 2.7 million people unemployed – 429,000 more than in 2019. According to the Federal Labor Agency (BA), the unemployment rate rose by 0.9 points to 5.9 percent.

Despite renewed restrictions on public life, the labor market remained almost unchanged in December. Not even in Berlin: 202,388 people were registered as unemployed, only 75 more than in November. Compared to December of the previous year, there were 52,238 more unemployed. The rate in the capital last year rose by 2.4 points to 10.1 percent. “Despite the recent deadlock, the labor market in the region is stable at the end of the year,” says Ramona Schröder, the new head of the Berlin-Brandenburg regional headquarters.

Why aren’t many other people losing their jobs?

First, part-time work is used as an argument: With the start of the closure in March, short-term work has risen to a historic level in a very short time. The previous maximum was reached in April with almost six million people. This corresponded to 18 percent of all employees subject to social security contributions. At its peak, 63 percent of employees in the hotel and restaurant industry and 27 percent in manufacturing received support. In parallel with the summer easing, demand fell again. With an average job loss of around 38 percent, the use of part-time work is likely to provide jobs for about one million employees.

At the moment, however, companies are making more use of this tool: In December, the Federal Employment Agency received advertisements for 666,000 people. There were 627,600 of them in November. The Office does not know until several months about the extent to which employees were actually sent to state-funded mandatory breaks. As a rule, short-term work is not implemented for all registrations.

Are there reasons other than part-time work?

The latest data cannot yet show the effects of the lock-in from 16 December and the related retail closure: The key date was 10 December. In addition, economic sectors are very differently affected by pandemic and political decisions. This is shown by BA’s assessment for Berlin: According to this, almost 1.6 million women and men were employed here in October, subject to social security contributions. 71,000 of them worked in the hospitality industry – 4.5 percent. They are seriously affected by short-term work and redundancies. However, in other areas with many more employees, employment remained stable or even increased. Examples are healthcare, public administration, construction and IT and the communication professions.

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In addition, labor market statistics exclude some groups: According to the definition of underemployment, which includes people in the measure, 3.5 million people did not have any social security work in the past year. BA chief Detlef Scheele also mentioned many marginalized people who are employed, especially in sectors that are heavily affected by Corona, such as catering, and who are not entitled to part-time work. “Mini-jobs are even more affected than employees subject to social security contributions – almost 400,000 less than a year ago,” he said.

From March to June, there were 837,004 fewer employers in Germany than in the same period of the previous year. This follows from data from the mini-job center requested by the left-wing member of the Bundestag, Sabine Zimmermann. And what about many self-employed people who are afraid of their livelihoods? In Berlin alone, 11,443 self-employed persons have registered with employment offices since April to apply for basic security.

What’s next for the new year?

For the current year, BA expects unemployment to fall by around 100,000 and an average of 700,000 short-term workers. Detlef Scheele believes that the labor market has stabilized since the summer – provided that vaccination outweighs the spread of coronavirus. “Of course I’ll bet on vaccinations,” said the head of the office. This could be reflected in the labor market in the summer and in the second half of the year: However, he also estimates “that we will not reach pre-crisis levels again until mid-2022.” Ramona Schröder notes that companies are currently suspended. They rarely hire because no one knows what will happen in the next few weeks and months.

Federal Labor Minister Hubertus Heil (SPD) is convinced: “I see a realistic chance that the economy will recover again from the summer of 2021 and gain considerable dynamism.” In their view, the period of unemployment benefits should be extended retroactively from 1 January by three months. In addition, the short-term contribution must be supplemented. Greens expert Wolfgang Strengmann-Kuhn believes that more support is needed for new employees. In addition, with regard to new technologies, there must be a bonus for training during part-time work or unemployment.

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