The labour market in August 2020

no corona-related rise in unemployment again

01 Sep 2020 | Press release no.39

“Unemployment increased at the usual rate in August; as in July, no additional increase was caused by the corona crisis. However, the effects of the pandemic on the labour market are still clearly visible”, said the Chairman of the Federal Employment Agency (BA), Detlef Scheele, at today’s monthly press conference in Nuremberg.

Unemployed persons in August:                          +45,000 – now 2,955,000

Unemployed persons compared to last year:    +636,000

Unemployment rate compared to last month:   +0.1 percentage points – now 6.4%

Unemployment and underemployment

The number of unemployed persons rose from July to August due to the summer break. The corona crisis did not cause an additional increase in August. The number of unemployed persons currently stands at 2,955,000. This constitutes a rise of 45,000 compared to last month and a decline of 9,000 if the figures are adjusted to account for seasonal factors. The number of unemployed persons has increased by 636,000 compared to last year. The unemployment rate amongst the overall population rose by 0.1 percentage points to 6.4% from July to August, constituting a rise of 1.3 percentage points compared to the figures recorded in August last year. The short-term unemployment rate stood at 4.5% in July, as calculated by the Federal Statistical Office according to the ILO short-term employment concept.

The underemployment rate, which also considers changes in labour market policy and short-term incapacity to work, has risen by 11,000 since last month if seasonal factors are taken into account. A total of 3,689,000 persons were underemployed in August 2020 – 487,000 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 170,000 million people from 1 to 26 August due to the economic situation. In other words, short-time working arrangements are still being reported for fewer people following the massive rise in March and April.

Data on the actual amount of short-time work is available until June. According to the provisional extrapolated figures of the BA, short-time working allowance was paid out to 5.36 million employees in June, 5.82 million in May and 5.98 million in April. 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 led to a considerable 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) has risen by 53,000 compared to last month when the figures are adjusted to account for seasonal factors. There are now 44.69 million persons in employment – 621,000 fewer than last year. According to the extrapolated figures of the BA, employment subject to national insurance payments increased by 40,000 in June – a decline of 99,000 had been recorded in the previous month. There has been a fall in employment subject to national insurance payments compared to last year, as 33.34 million workers have been recorded – 63,000 fewer than in June 2019.

Labour demand

The demand for new workers plummeted at the start of the corona crisis and has since continued to stabilise slightly at a low level. 584,000 jobs were registered with the BA in August – 211,000 fewer than a year ago. If these figures are adjusted to account for seasonal factors, the amount of jobs registered with the BA has increased slightly by 4,000. Similar to the months since May, the number of new jobs registered with the BA increased slightly in August. The BA job index (BA‑X) – an indicator of the labour demand in Germany – rose by 2 points to 94 points in August 2020, putting it 32 points below the level recorded last year.

Cash benefits

1,144,000 persons received unemployment benefits in August 2020 – 397,000 more than a year ago. In August, there were 4,044,000 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 188,000 persons compared to August 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 pandemic. The processes have picked up speed again, but there is still a significant delay compared to a “normal” year. From October 2019 to August 2020, 458,000 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. At the same time, 507,000 in-company training positions were registered – 42,000 fewer than last year. In comparison to the previous year, there was a noticeable decrease in the number of apprenticeships registered by metalworking and electrical engineering firms, hairdressing salons, hotels and restaurants,i IT companies and commercial trades.

154,000 apprenticeships were still vacant in August. At the same time, 142,000 applicants were still looking in August, of which 100,000 had yet to be placed in an apprenticeship. Even after the statistical counting day in mid-August, the training market is still very much in motion. Experience shows that there will be a considerable decrease in the number of vacant apprenticeships and unplaced applicants by the reporting date on September 30.