The German industry is already longer in recession, the first company to announce job cuts on a larger scale. At the same time, short-time working is increasing. What’s up with that?
A survey by the Munich-based ifo Institute showed that around one out of every twelve company expects currently in the manufacturing sector in Germany in order to still need in this quarter of your employees are “on short-time working” set. This is exactly 8.5% of the surveyed companies (in the previous year, there were still 2.6 per cent) mean the highest value in six years.
Is supported, the forecast, apparently, by the Numbers, collected by the Federal employment Agency(BA). Their extrapolations according to the number of employees, is short-time work has risen to almost 44,000. This figure relates to April. In April 2018 it had been 13.000. For the months of may, June and July 2019, the BA expects to see a decline in these Numbers.
The ifo Institute does not share this expectation, however. The economic chief at the Bavarian industry, researchers, Timo Wollmershäuser, says: “The actually realised short-time work will be available in numbers until much later. However, as between you and the ifo expectations, there is a close statistical connection is likely to be revised, the estimates of the Federal employment Agency in the coming months.”
Experience of almost a century
Short-time work, there is already since February, 1924, as the “short-time working support” in the framework of the “regulation on unemployment support” in the Weimar Republic was introduced. In Germany, this support payment for the unemployed workers under the name of “short-time working money” since 1957.
“First Tracks”
“The economic slowdown leaves gradually make their mark on the labour market,” says Timo Wollmershäuser. “The German industry is since the middle of last year in a recession. Short-time work is a means of choice, if companies want to keep, in spite of the difficult economic times of professionals.”
Holger Schäfer from the Institute of the German economy in Cologne do not want to talk about “the crisis.”
“No sign of mass redundancies”
In the Germany radio of the economic head of the Berlin-based research Institute DIW, Claus Michelsen said, many companies responded currently with structural measures, to ensure that the current economic cycle was coming towards apparently his end: “As layoffs are a means. However, that is still no sign that it will come to mass layoffs and mass unemployment in Germany.”
The DIW expert warns, on the contrary, prior to alarmism. Also, if you currently have job losses plans at large corporations such as Deutsche Bank, Deutsche Telekom, Ford, Thyssenkrupp, BASF and Siemens were responsible for the headlines, not over whether “the employment miracle in Germany”.
“Don’t talk!”
Similar to the Economist Holger Schäfer from the Institute of German economy (IW) in Cologne said. He recalls that Shortly in the aftermath of the global crisis of 2008 and 2009 were far higher, and in some cases even the million limit would be exceeded.
It is not likely that Germany will in the short term will come back in such a Situation. A booming service sector will be able to intercept the industrial recession. Despite the noticeable slowdown in the employment structure of these but still substantial: “We must ensure that we don’t talk to us the crisis.”
Proven Means
From the point of view of IG Metall, Germany has made particularly in the financial and economic crisis about ten years ago, already had good experiences with this measure. Currently, the Union is proposing to combine the short-time work and qualification measures.
Thus, structural breaks are to be cushioned, as industry for example in the automobile when switching from combustion engines to electric mobility in the labour market. The car maker expect for this year, with a decline in new business from one percent to their home market.
Carl Martin Welcker, President of the engineering Association VDMA, feared a drop in production of around two percent.
Requirement of the policy
Also Germany’s second largest industry after the car industry, machine and plant construction, expects a significant decline in production. This will shrink according to the VDMA-President Carl Martin Welcker to two percent. The industry litte, so Welcker, also under the trade conflict between the United States and China, the Brexit-the uncertainties and the uncertainty around the future of the TRANS-Atlantic trade. “The uncertainty is very harmful. We therefore request that the policy to act at last.”
The Federal Minister of labour, Hubertus Heil (SPD) provides for the labour market, however, is well prepared and refers to the short-time working money, the new qualification of chance, law, and the high reserves of the BA. The Minister brought in a possible Revision of the rules for the reference of the Kurzarbeitergelds into the conversation. “We will also keep in view whether the possibilities of short-time working to become stronger with training connected.”