Is the turning point on the job market now?
According to calculations by the Ifo Institute, the number of short-time workers in Germany fell to 5.6 million in July. In June there were 6.7 million and in May 7.3 million! The proportion of short-time workers in employment relationships subject to social security contributions shrank from 20 to 17 percent.
Background: Because of the corona pandemic, thousands of companies had applied for short-time work benefits for their employees so that they did not have to quit their jobs. The Federal Agency pays 60 percent of the lost net wages for short-time work. The figure for workers with children is 67 percent. From the fourth month of short-time work, the proportion increases to 70 percent, and 77 percent for employees with children. From the seventh month onwards, there will be another ten percent increase.
After the end of the lockdown, a trend reversal appears to be emerging on the labor market – fewer and fewer companies are applying for short-time work for their employees. However, the Ifo Institute warns of euphoria.
“The decline has accelerated overall, but short-time working is even increasing in some industries,” explained Ifo labor market expert Sebastian Link. This includes mechanical engineering and the electrical industry: 378,000 people are now working short-time in mechanical engineering, compared to 354,000 in June.
In the electrical industry, 271,000 people are now on short-time work after 260,000 people in June. In industry as a whole, however, the number of short-time workers fell slightly from 2.3 million to 2.1 million people – including in the automotive and metal industries.
Hospitality most affected
According to the information provided by service providers, significantly fewer people are now on short-time work. There are currently 465,000 people in the hospitality industry, or 42 percent. In June the figure was 61 percent and in May 72 percent.
The Prime Minister of Lower Saxony Stephan Weil (SPD) demands that the period for receiving short-time benefits be extended. “I believe that short-time work benefits should be extended to 24 months,” Weil told RTL. Short-time work benefits are currently available for up to 12 months.
“We are not dealing with a normal economic crisis, but with a very special kind of crisis. Such crises must also be answered flexibly,” said Weil. He knows many companies that did not want to lay off their workforce because these companies needed their employees during an upswing. “This means that we have to build the employment bridges longer than has been the case until now.”
Short-time work is currently being phased out in many companies, said Weil of the German Press Agency. “And if these companies are now faced with the choice of either paying in full or being fired, the decision is relatively clear,” said Weil. The most important point for him is the preservation of value chains in Germany. “And that’s why we are challenged in a variety of ways to give as many companies as possible with an active state policy.”
Pension insurance supports the Weil advance
Ingrid Hartges, managing director of the Dehoga gastro association, welcomes the initiative: “The extension is urgently needed because the crisis will continue to push the hospitality industry well into the next year.”
Weil also received support from the Deutsche Rentenversicherung. “An extension of the short-time work benefit would relieve the pension insurance financially, especially if the employment would otherwise have to be ended and the contributions would therefore be eliminated,” said a spokesman for BILD.
Background: Contributions are also paid into the pension insurance if someone receives short-time work benefits.
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