The labour market in March 2021

Spring revival despite rising infection figures

31 Mar 2021 | Press Release No. 13

“There was a noticeable springtime upturn in the labour market in March, despite the fact that infections are rising and restrictions remain in place for some sectors of the economy. Overall, however, the labour market continues to show very clear signs of the crisis, which has now been going on for a year,” said Detlef Scheele, Chairman of the Federal Employment Agency (BA), today at the monthly press conference in Nuremberg.

Unemployment in March:

-77,000 – now 2,827,000

Unemployed persons compared to last year:

+492,000

Unemployment rate compared to last month:

-0.1 percentage points to 6.2 percent

Unemployment and underemployment

In the course of the emerging springtime upturn, the number of unemployed at 2,827,000 is 77,000 lower than in the previous month. Seasonally adjusted, it fell by 8,000. The unemployment rate fell by 0.1 percentage points to 6.2 percent. Compared to March of last year, the number of unemployed has increased by 492,000. The unemployment rate recorded an increase of 1.1 percentage points 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 February.

Underemployment, which also takes into account changes in labour market policy and short-term incapacity to work, was at 3,624,000 in March. That is 344,000 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, cyclical short-time work was reported for 197,000 persons from March 1 to 25. The higher level of reports since November is due to the renewed containment measures as a result of the increased infection figures.

Current data on actual take-up is available until January 2021. According to preliminary extrapolated data from the Federal Employment Agency, cyclical short-time allowances were paid to 2.85 million workers in January. 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.

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 13,000 in February 2021 compared to the previous month, seasonally adjusted. At 44.35 million people, it was 754,000 lower than in the previous year. Employment subject to social security contributions, whose data only extend to January 2021, increased by 4,000 in this month, seasonally adjusted. Compared to the previous year, employment subject to social security contributions fell in January by 96,000 to 33.51 million, according to BA extrapolations. Marginal paid employment is more strongly affected by the corona-related measures. According to preliminary, extrapolated data from the BA, there were 560,000 fewer marginally paid employees (in total) in January (6.87 million) than in the same month of the previous year. A good two-fifths of the decline was due to the hospitality industry.

Labour demand

In March, 609,000 jobs were reported to the BA, 82,000 fewer than a year ago. If these figures are adjusted to account for seasonal factors, the amount of jobs reported to the BA has increased by 12,000. The BA job index (BA‑X) – an indicator for the demand for personnel in Germany – rose by 4 points to 102 points in March 2021. This is 11 points below the figure for the previous year.

Cash benefits

1,031,000 people received unemployment benefits in March 2021, 183,000 more than a year ago. The number of employable benefit claimants in the Basic Security for Jobseekers (SGB II) was 3,905,000 in March. Compared to March 2020, this was an increase of 89,000 people. This means that 7.2 percent of people of working age living in Germany were in need of assistance.

Vocational training market

From October 2020 to March 2021, 323,000 persons applied for vocational training through their local Agentur für Arbeit or Jobcenter. That’s 46,000 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 made because the usual access routes are blocked and cannot be completely replaced by digital alternatives. 197,000 applicants are still unplaced. At the same time, 415,000 vocational training places were reported, 32,000 fewer than a year ago. This reflects the restrictions and uncertainties caused by the pandemic as well as the transformation processes in the economy. Of the vocational training places reported, 260,000 were still unfilled in March. However, the vocational training market is still very much in motion in March. Therefore, it is too early to make an informed assessment.