Job slump only temporary
Unemployment is rising – but not everywhere
By Laura Stresing & Christoph Wolf
08/01/2023 at 4:13 p.m
Germany’s economy is weakening. This is also reflected in the labor market. However, some regions are bucking the trend. Young people in particular have good opportunities.
The traditional summer lull on the job market is making itself felt more strongly in almost all federal states than in the previous year. Only in Mecklenburg-Western Pomerania were slightly fewer people looking for a job in July 2023 than in 2022. This is the result of the latest data from the Federal Employment Agency, which was published on Tuesday. Accordingly, the nationwide unemployment rate rose by 0.2 percentage points to 5.7 percent in July 2023 compared to the same month last year. The Federal Employment Agency cites the weak economic situation in Germany as one of the reasons for the increase.
Unemployment rates rose particularly sharply in Saxony, at 0.6 percentage points, and in Bremen, Thuringia and Saarland, each at 0.5 percentage points. Bavaria and Berlin seem less affected. However, the individual countries start with very different starting conditions: Unemployment in the city states of Bremen, Hamburg and Berlin tends to be more pronounced than, for example, in the south of the republic.
The monthly evaluation of the labor market statistics also enables a detailed view of the individual regions. Additional disparities within the federal states become visible – for example between the urban conurbations, which traditionally tend to have a higher unemployment rate, and the surrounding areas.
In general, the nationwide trend is somewhat more differentiated: in 287 of 400 districts and cities, more people were recently unemployed than in July last year. In contrast, unemployment fell slightly or remained the same in 113 regions. Here, too, Mecklenburg-Western Pomerania stands out, but also parts of Bavaria, Saxony-Anhalt and Brandenburg.
In Hesse, too, the summer and economic effects on the labor market were less pronounced than feared. Adjusted for the seasonal effects, the number of unemployed has even fallen by 4,000 people, said the head of the responsible regional directorate in Frankfurt, Frank Martin. The job market in Hesse is stabilizing and additional jobs subject to social security contributions are being created.
Demographic change has a stronger effect than the economic situation
In general, the job centers are optimistic that the unemployment figures will soon fall again. Many school leavers will probably no longer be unemployed after the summer holidays, but will start vocational training. In addition, the demand for labor remains high despite the gloomier mood among companies. The head of the North Regional Directorate, Markus Biercher, sums it up like this: “The demographic development has a much stronger impact on the development of the labor market than economic dents.”
In his area of responsibility in Schleswig-Holstein, too, the employment agency found that many positions were advertised – but there weren’t enough applicants. Companies in Schleswig-Holstein are still looking for staff, especially in trade, in logistics, in health and social services, in manufacturing, as well as in construction and hospitality.
The situation is similar on the training market: the almost 8,400 vacant training places in Schleswig-Holstein contrast with just under 4,200 young people who are still looking for a job. In Lower Saxony, as many as 23,000 training positions have so far remained vacant, while only 13,000 potential applicants are registered with the employment agency. In Rhineland-Palatinate, the responsible regional office counts 11,000 vacancies and 6,100 young job seekers.
According to the regional directorate in Lower Saxony, young refugees now play an important role in the labor market in view of this imbalance. Around ten percent of the registered applicants came from Syria, Iraq or Afghanistan. “Without these young people, the gap between young people would be even greater. We must join forces to ensure that their training is successful,” said head of department Johannes Pfeiffer.