Thursday July 30, 2020
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Light at the end of the tunnel: The consequences of the corona crisis on the German labor market are weakening. Unemployment rose only slightly in July. Yet hundreds of thousands more are looking for a job than a year ago. Short-time work also secures the job for millions of people.
The number of unemployed in Germany rose in July. However, the job market is increasingly coping with the consequences of the corona crisis. “The labor market is still under pressure due to the corona pandemic, even if the German economy is on a recovery path,” said the Executive Board of the Federal Employment Agency (BA), Daniel Terzenbach. The number of unemployed rose to the usual extent at the beginning of the summer break. The corona-related increase has not continued for the time being this month.
Overall, the number of unemployed rose from June to July by 57,000 to 2.91 million, according to the BA. That was 635,000 more than a year ago. The unemployment rate rose by 0.1 points to 6.3 percent.
It is common for July, among other things, due to the summer holidays and the end of many apprenticeships, a slight increase in the number of unemployed, which was on average 50,000 over the past year. Taking seasonal fluctuations into account, the number of unemployed fell by 18,000 in July.
Short-time work prevented a higher increase: According to preliminary data, 6.7 million employees received short-term economic benefits in May. In April the number was still 6.1 million. According to extrapolations, the highest number of short-time workers in the Federal Republic was ever reached in May. In March, 2.46 million people were on short-time work. In July, companies announced short-time work for 190,000 people. After the massive increase in March and April, the number continued to decrease significantly, it said. Experience has shown that the number of actual short-time workers is lower because companies sometimes report short-time work as a precaution.
Ifo: Short-time work, especially in the industry and travel industry
According to calculations by the Ifo Institute, the number of companies with corona-related short-time work is falling – albeit slowly. In July, 42 percent of the companies still did short-time work, which took part in the Ifo business survey. In June it was 46 percent and in May even 53 percent. “The decline in short-time working is very slow,” says Ifo labor market expert Sebastian Link.
Industry remained the leader in July with 57 percent of companies, after 64 percent in May and June. Among service providers, 39 percent of companies were still on short-time work in July, 47 percent in June and even 48 percent in May. In retail it was 31 percent in July, after 29 percent in June and 55 percent in May. Construction is comparatively little affected, where only 11 percent of companies had short-time working in July, after 25 percent in June and 32 percent in May.
Travel agencies and tour operators were still badly affected in July with 89.2 percent. The share was 83.3 percent for hotels, 81.4 percent for creative and artistic professions and 73.9 percent for gastronomy. There was particularly little short-time working in July with financial and insurance service providers, with property and housing as well as with telecommunications.
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