The Labour Market in December 2020

Short-time work is stabilising, seasonally adjusted unemployment continues to decline

05 Jan 2021 | Press release no.1

“The number of unemployed people increased in December – but not as much as usual this month. Reports of short-time work have increased again – but only to a limited extent. Demand from companies is stabilising at a lower level,” said Detlef Scheele, Chairman of the Board of the Federal Employment Agency (BA), at the monthly press conference in Nuremberg today.

Unemployment Rate in December:
+8,000 – now 2,707,000

Unemployed persons compared to last year:

Unemployment rate compared to last month:
unchanged at 5.9 percent

Unemployment and underemployment

Unemployment rose less than usual from November to December. At 2,707,000, the number of unemployed is 8,000 higher than in the previous month. Seasonally adjusted, it decreased by 37,000. Compared to the previous year, the number of unemployed increased by 480,000. The unemployment rate in December is 5.9 percent, the same as in November, but up one percentage point compared to December last year. The unemployment rate determined according to the ILO employment concept by the Federal Statistical Office was 4.4 percent in November.

If seasonal factors are taken into account, there has been a decrease of 28,000 compared to last month with regard to the underemployment rate, which also considers changes in labour market policy and short-term incapacity to work. Overall, underemployment stood at 3,534,000 people in December 2020. That is 363,000 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 current data on verified reports, 666,000 persons were notified of cyclical short-time work from December 1 to 28. The higher level of reports in November and December is due to the renewed containment measures as a result of the increasing numbers of infections.

Current data on actual take-up will be available by October. According to preliminary extrapolated data from the Federal Employment Agency, the cyclical short-time allowance was paid to 1.99 million workers in October. This indicates a gradual drop in the amount of short-time working allowance claimed since the high of almost 6 million in April.

Gainful employment and employment subject to national insurance payments

With the economic restrictions in the wake of the Corona crisis, labour force participation and employment had decreased significantly, but recently they stabilised at the lower level. According to the Federal Statistical Office, the number of employed persons (according to the domestic concept) fell by 3,000 in November compared to the previous month, seasonally adjusted. At 44.87 million persons, it was 734,000 lower than in the previous year. Employment subject to social security contributions, whose data only extend to October, increased by 59,000 in this month, seasonally adjusted. Compared to the previous year, employment subject to social security contributions fell in October by 109,000 to 33.86 million employees, according to BA projections.

Labour demand

At the end of the year, labour demand is stagnating in the wake of the containment measures. In December, 581,000 jobs were reported to the BA, 105,000 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 by 5,000. The BA Jobs Index (BA X) – an indicator of demand for personnel in Germany – remained unchanged at 99 points in December 2020. This is 18 points below the figure for the previous year.

Cash benefits

1,061,000 people received unemployment benefits in December 2020, 294,000 more than a year ago. The number of employable benefit claimants in the Basic Security for Job Seekers (SGB II) was 3,796,000 in December. Compared to December 2019, this was an increase of 57,000 people. This means that 7.0 percent of people of working age living in Germany were in need of assistance.

Training market

In the post-placement period on the training market for an immediate start to training, there were 73,000 young people looking for training between October and December, which was about 12,000 more than last year due to corona. This contrasted with 72,000 registered company-based training places, 8,000 more than in the previous year. 33,000 applicants, or just under half, were still unplaced in December and another 24,000 were still looking for a training place despite having an alternative. At the same time, just under 17,000 training places were still unfilled.

For the new reporting year 2020/21, ten percent fewer applicants have been registered so far than in December of the previous year due to the pandemic-related restrictions. The number of training places is eight percent below the previous year’s figure.