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The labour market in June 2020

Stabilised by extensive short-time work
01 Jul 2020 | Press Release No. 34

“The labour market is still feeling the pressure of the corona pandemic, but the extensive utilisation of short-time work is stabilising the labour market”, said the Chairman of the Federal Employment Agency (BA), Detlef Scheele, at today’s monthly press conference in Nuremberg.

Unemployed persons in June:
+40,000 – now 2,853,000

Unemployed persons compared to last year:
+637,000

Unemployment compared to last month:
+0.1 percentage points – now 6.2%

Unemployment and underemployment

The number of unemployed persons rose considerably from May to June as a result of the corona crisis, but the rate of increase has been slowing down over the past few months. The figure now stands at 2,853,000, constituting a rise of 40,000 compared to last month and a growth of 69,000 if the numbers are adjusted to account for seasonal factors.

The number of unemployed persons has increased by 637,000 compared to last year. The unemployment rate amongst the overall population has risen by 0.1 percentage points to 6.2%, constituting a rise of 1.3 percentage points compared to the figures recorded in June last year. The unemployment rate amongst the labour force stood at 4.4% in May, 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 56,000 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 3,604,000 persons were underemployed in June 2020 – 439,000 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 342,000 people from 1 June to 25 June due to the economic situation; reports had been submitted for 1.14 million people in May and a total of 10.66 million people in March and April.

Data on the actual amount of short-time work is available until April. According to the provisional extrapolated figures of the BA, short-time working allowance was paid out to 6.83 million employees in April, and 2.49 million received short-time working allowance in March. This puts the amount of short-time working allowance 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, 44.71 million persons were in employment (in line with the domestic concept) in May, constituting a fall of 531,000 compared to last year. However, there was a slight rise in employment subject to national insurance payments in April compared to last year. According to the extrapolated figures of the BA, a total of 33.41 million persons were in employment subject to national insurance payments in April, constituting a rise of 30,000 compared to last year. If these figures are adjusted to account for seasonal factors, the levels fell by 276,000 from March to April, which is when the first economic restrictions were introduced in response to the corona pandemic. This significant decrease has mainly been caused by the closure of hotels and restaurants in response to the corona pandemic.

Labour demand

The demand for new workers plummeted at the start of the corona crisis and has since stabilised at a low level. 570,000 jobs were registered with the BA in June – 227,000 fewer than last year. If these figures are adjusted to account for seasonal factors, the number of jobs registered with the BA has dropped by 20,000. The number of new jobs registered with the BA increased slightly in May and June. The BA job index (BA X) – an indicator of the labour demand in Germany – remained unchanged at 91 points in June 2020, putting it 38 points below the level recorded last year.

Cash benefits

1,077,000 persons received unemployment benefits in June 2020 – 383,000 more than a year ago. In June, there were 4,076,000 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 152,000 persons compared to June 2019; 7.5% 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. There is still a delay of around six to eight weeks. From October 2019 to June 2020, 417,000 persons applied for an apprenticeship through their local Agentur für Arbeit or Jobcenter – 43,000 fewer than in the same period in the previous year. 210,000 of those applicants were still looking in June. At the same time, 479,000 in-company training positions were registered – 47,000 fewer than last year. There has been a noticeable decline in the number of apprenticeships registered by hotels and restaurants, metalworking and electrical engineering firms, hairdressing salons, commercial trades and IT companies. 229,000 apprenticeships were still vacant in June. However, the training market is still in motion, and so it is still too early for a more informed evaluation.