Germany: Temporary workers are first victims of recession

Published on, by Ludwig Niethammer, 12 January 2009.

First dismiss temporary workers, then implement short-time work, finally push through mass redundancies. This is the plan adopted by many German companies, above all in the auto industry, as their response to the developing recession …

… The chief economist of Deutsche Bank, Norbert Walter, has an even grimmer assessment. He does not rule out a complete crash of the German economy. “The situation has worsened in the last six weeks,” Walter wrote recently. According to Walter, German gross domestic product could shrink in the coming year by 4 percent, because important trading partners such as the European countries, Japan and states that export raw materials are suffering at the moment more severely than Germany.

DZ Bank analyst Philipp Jäger recently said, “At present we have a largely unchanged situation on the job market, with only seasonal variations. The real dismantling of jobs will begin in January.”

The real employment trend was indicated by the latest employment figures, announced on January 7. The official figure of newly unemployed—114,000—is much higher than in December of last year. It means that total unemployment in Germany, according to official figures, stands at 3.1 million.

The official statistic vastly underestimates the severity of the employment situation in Germany. It excludes 1 million workers who are being “sponsored” by the federal labour agency in €1-per-hour jobs. The figure also does not include workers on short-time, as well as many temporary workers who have been dismissed and are not registered.

The statistic also excludes those who have been denied benefits for failing to measure up to the stringent standards laid down by the federal labour agency, as well as the 3.8 million workers employed in so-called “mini-jobs” that pay €400 per month.

In the course of December, 770,000 people applied to the labour agency looking for work. This figure is 15 percent higher than one year ago. In the course of 2008, 8.44 million citizens were unemployed at one time or another. On average, they remained without a job for 38.7 weeks. (full text).

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