The Labour Market in February 2021

The Labour Market continues to withstand the Lockdown

02 Mar 2021 | Press Release No. 8

“The number of unemployed people increased slightly in February. Short-time work continues to secure employment on a large scale and prevent unemployment. Individual industries are feeling the effects of the lockdown, but overall employment is recovering,” said the Chairman of the Federal Employment Agency (Bundesagentur für Arbeit – BA), Detlef Scheele, today at the monthly press conference in Nuremberg.

Unemployment in February:                            
+4,000 – now 2,904,000

Unemployed persons compared to last year:    
+509,000

Unemployment rate compared to last month:    
unchanged at 6.3 percent

Unemployment and underemployment

At 2,904,000, the number of unemployed is 4,000 higher than in the previous month. Seasonally adjusted, it rose by 9,000. The unemployment rate was 6.3 percent, as in January. Compared to February of last year, the number of unemployed has increased by 509,000. The unemployment rate recorded an increase of one percentage point compared to the previous year. The unemployment rate determined according to the ILO employment concept by the Federal Statistical Office was 4.6 percent in January.

Underemployment, which also takes into account changes in labour market policy and short-term incapacity to work, was 3,692,000 in February 2021. That is 359,000 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, 500,000 persons were notified of cyclical short-time work from February 1 to 24. The higher level of reports since November is due to the renewed containment measures as a result of the increasing numbers of infection.

Current data on actual take-up will be available by December. According to preliminary extrapolated data from the Federal Employment Agency, cyclical short-time allowances were paid to 2.39 million workers in December. The take-up of short-time allowance had gradually declined after the previous peak in April with just under 6 million, but rose again in November with the renewed containment measures.

Labour Force Participation and Employment

As a result 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 labour force participants (according to the domestic concept) rose by 16,000 in December compared to the previous month, seasonally adjusted. At 44.36 million persons, it was 739,000 fewer than in the previous year. Employment subject to social security contributions, whose data only extend to December 2020, increased by 64,000 this month on a seasonally adjusted basis. Compared to the previous year, employment subject to social security contributions fell in December by 52,000 to 33.69 million employees, according to BA projections. Marginal employment is being more strongly affected by corona-related measures. According to preliminary, extrapolated data from the BA, there were 529,000 fewer marginally paid employees (in total) in December (7.01 million) than in the same month of the previous year. Almost half of the decline was in the hospitality sector.

Labour demand

In February, 583,000 jobs were registered with the BA, 107,000 fewer than a year ago. If these figures are adjusted to account for seasonal factors, the number of jobs registered with the BA has dropped by 3,000. The BA Jobs Index (BA‑X) – an indicator of demand for personnel in Germany – remained unchanged at 97 points in February 2021. This is 18 points below the figure for the previous year.

Cash benefits

1,092,000 people received unemployment benefits in February 2021, 203,000 more than a year ago. The number of employable benefit claimants in the Basic Security for Jobseekers (SGB II) was 3,867,000 in February. Compared to February 2020, this was an increase of 108,000 people. This means that 7.1 percent of people of working age living in Germany were in need of assistance.

Training market

From October 2020 to February 2021, 294,000 persons applied for an apprenticeship through their local Agentur für Arbeit or Jobcenter. That’s 40,000 fewer than in the previous year. The decline is not to be equated with a declining interest of young people in vocational training. Rather, reports are not being made because the usual channels of access are blocked and cannot be completely replaced by digital alternatives. At the same time, 387,000 apprenticeship positions were reported, 37,000 fewer than a year ago. This reflects the restrictions and uncertainties caused by the pandemic as well as the transformation processes in the economy. However, the apprenticeship market is still very much in motion in February. Therefore, it is too early to make an informed assessment.