The labour market in May 2020

Continued pressure in the corona crisis

03 Jun 2020 | Press Release No. 32

“The labour market is still feeling the pressure of the corona pandemic. Unemployment and underemployment levels increased in May, but not as strongly as in April. The crisis is starting to leave its mark on employment patterns, as the amount of short-time work has clearly exceeded the levels recorded in the 2009 crisis. The demand for new employees continues to decrease, but the situation has stabilised somewhat”, said the Chairman of the Federal Employment Agency (BA), Detlef Scheele, at today’s monthly press conference in Nuremberg.

Unemployed persons in May:
+169,000 – now 2,813,000

Unemployed persons compared to last year:
+577,000

Unemployment compared to last month:
+0.3 percentage points – now 6.1%

Unemployment and underemployment

The number of unemployed persons rose again from April to May as a result of the corona crisis, but not as strongly as last month. The figure now stands at 2,813,000, constituting a rise of 169,000 compared to last month and a growth of 238,000 if the numbers are adjusted to account for seasonal factors.

The number of unemployed persons has increased by 577,000 compared to last year. The unemployment rate amongst the overall population has risen by 0.3 percentage points to 6.1%, constituting a rise of 1.2 percentage points compared to the figures recorded in May last year. The unemployment rate amongst the labour force stood at 4.3% in April, as calculated by the Federal Statistical Office according to the ILO employment concept.

The underemployment rate, which also considers changes in labour market policy and short-term incapacity to work, has risen by 170,000 since last month if seasonal factors are taken into account. In other words, underemployment is not growing as quickly as unemployment. This is largely due to the fact that labour market policies were not implemented due to social distancing restrictions. A total of 3,573,000 persons were underemployed in May 2020 – 383,000 more than a year ago.

Short-time work

Before receiving short-time working allowance for their employees, companies have to report the expected reduction in their working hours. According to the data obtained so far, short-time working arrangements were reported for 1.06 million people from 1 May to 27 May due to the economic situation; reports had been submitted for a total of 10.66 million people in March and April. However, not all those reported workers will necessarily have their working hours cut.

The latest data on the actual amount of short-time work is from March, which means it covers the first month in which the corona crisis worsened. According to the provisional extrapolated figures of the BA, short-time working allowance was paid out to 2.02 million employees in March due to the economic situation. This puts the amount of short-time working allowance paid out in March alone well above the levels recorded in the great recession of 2008/2009.

Minor employment and employment subject to national insurance payments

The corona crisis has also led to a decline in minor employment and employment subject to national insurance payments. According to the Federal Statistical Office, the number of persons in employment (in line with the domestic concept) in April dropped by 275,000 compared to the previous month if the figures are adjusted to account for seasonal factors. There are now 44.90 million persons in employment – 218,000 fewer than last year. However, there has been a rise in employment subject to national insurance payments compared to last year. According to the extrapolated figures of the BA, a total of 33.62 million persons were in employment subject to national insurance payments in March, constituting a rise of 330,000 compared to last year. If these figures are adjusted to account for seasonal factors, the levels fell by 21,000 from February to March, which is when the first economic restrictions were introduced in response to the corona pandemic.

Labour demand

The demand for new workers has absolutely plummeted as a result of the corona crisis. 584,000 jobs were registered with the BA in May – 208,000 fewer than a year ago. If these figures are adjusted to account for seasonal factors, the amount of jobs registered with the BA has dropped by 44,000. However, the number of new job registrations has stabilised somewhat following the strong decline in April. The BA job index (BA‑X) – an indicator of the labour demand in Germany – fell by 3 points to 91 points in May 2020, putting it 38 points below the level recorded last year.

Cash benefits

1,058,000 persons received unemployment benefits in May 2020 – 364,000 more than a year ago. In May, there were 4,027,000 persons who were fit to work and eligible to receive basic security benefits for job seekers (German Social Security Code II). This represents an increase of 75,000 persons compared to May 2019; 7.4% of people of working age living in Germany were in need of help.

Training market

Fewer vacancies are being filled on the training market as a result of the corona crisis. From October 2019 to May 2020, 400,000 persons applied for an apprenticeship through their local Agentur für Arbeit or Jobcenter – 39,000 fewer than in the same period in the previous year. 229,000 of those applicants were still looking in May. At the same time, 463,000 in-company training positions were registered – 46,000 fewer than last year. There has been a noticeable decline in the number of apprenticeships registered by hotels and restaurants, hairdressing salons, mechanical and industrial engineering companies, electrical engineering firms, commercial trades, IT companies, food retailers and trucking firms. 250,000 apprenticeships were still vacant in May. However, the training market is still very much in motion, and so it is still too early for a more informed evaluation.