News & Politics - German unemployment below 4 million for first time since 2002

elisheva · 05-02-2007, 01:24 PM

Quote:

International Herald Tribune
In boost for Merkel, German unemployment drops below 4 million
By Judy Dempsey
Wednesday, May 2, 2007

BERLIN: Merkel gets boost from the strong data

Chancellor Angela Merkel's coalition government received a boost Wednesday after the Federal Labor Office announced that German unemployment fell last month to under the politically sensitive level of four million for the first time since 2002.

Illustrating how Germany's recent upturn was rippling across the Continent, the European Union's statistics office also reported that unemployment across the euro zone had fallen to its lowest point since 1993.

The biggest declines were recorded in Germany, Europe's biggest economy. But improvements were also seen in France, the Netherlands, Belgium and Ireland, Eurostat said. Seasonably adjusted, the unemployment rate in the 13 countries using the euro fell to 7.2 percent in March, compared to 7.3 percent in February.

The German labor office said 3.9 million people were without work in April, compared with 4.1 million in March and the postwar high of just above 5 million two years ago. April's seasonally adjusted rate was 9.2 percent, compared with 11 percent in April 2006.

The encouraging data coincided with growing support for Merkel's conservative bloc and the Free Democratic Party, the pro-business party with which Merkel had originally wanted to establish a coalition in late 2005. But the two parties failed to win enough votes for a stable majority, pushing Merkel to enter a coalition with the Social Democrats, who were in second place.

Until recently, opinion polls had indicated that the conservatives and the Social Democrats would have to remain in a so-called grand coalition for some time yet because neither party was strong enough to break out of it and find a junior partner.

But a survey published this week by the polling institute Forsa showed that for the first time since late 2005, Merkel and the Free Democrats could govern if elections were held next weekend. According to Forsa, the conservatives would win 37 percent and the Free Democrats 11 percent. The Social Democrats have sunk to 26 percent while the Greens have 10 percent and the Left Party 11 percent, leaving this possible coalition short of a majority. The survey was conducted from April 23 to April 27 and had a margin of sampling error of 2.5 percentage points.

With the political landscape changing, Merkel's conservatives and the Social Democrats, who are led by Kurt Beck, are each taking the credit for the decline in unemployment.

The conservatives claim that wage restraint and the willingness of enterprises to adopt more flexible work practices have been some of the factors contributing to the falling unemployment.

Franz Müntefering, the Social Democrat who is vice chancellor and labor minister, said unpopular measures pushed through by Gerhard Schröder as chancellor were finally paying off. Schröder's government of Social Democrats and Greens reduced some welfare payments and introduced a system in which anyone unemployed for a certain period of time was obliged to accept any job that was offered by the local employment agency or see their benefits cut.

But economists said the real engine behind the fall in unemployment was the expansion of the German economy.

"The economic upswing continues to pump energy into the job market," said Frank-Jürgen Weise, director of the Federal Labor Office.

Economics Minister Michael Glos this week revised his forecasts for economic growth for 2007, saying that gross domestic product would increase 2.3 percent, compared with earlier estimates of 1.7 percent.

The export boom experienced by German companies, ranging from electronics and automobiles to engineering and machine goods, was driving growth and jobs, analysts said.

"First, it is exports," said Karl Brenke, economist at the German Institute for Economic Research in Berlin. "Then it is capital investments, which mean more jobs and lots of spin-offs. Finally, it is private consumption."

Germany's exports have soared this year despite the strong euro. According to the latest figures released by the Federal Statistical Office, exports jumped almost 11 percent in February compared to the same period in 2006.

"Upon calendar and seasonal adjustment, the foreign trade balance recorded a surplus of €13.8 billion in February 2007," the office recently reported.

The other reason for the sustained strong economic growth was that many companies, faced with growing competition from Asia, have restructured and kept wages under control, economists said.

"Competitiveness has improved and there has been substantial restructuring in the companies," Brenke said.

German trade unions are taking advantage of the strong economic growth and lower unemployment to demand higher wages.

IG Metall, the metalworkers' union, is seeking a 6.5 percent increase in wages for its 3.4 million workers after rejecting in March an offer from the employers of 2.5 percent and a one-time payment of 0.5 percent.

More than 60,000 workers in Germany's engineering and metalworking sector took part in temporary stoppages on Wednesday, putting pressure on employers the day before an important round of wage negotiations, Reuters reported. DaimlerChrysler, Porsche and Audi, the truck maker MAN and the French-American telecommunications equipment maker Alcatel-Lucent, were among the companies affected by the stoppages, the union said, according to the report.

A fifth round of wage negotiations between IG Metall and employers is set for Thursday, and the head of the employers' group Gesamtmetall said Wednesday that he hoped a deal would be reached soon, the report added.

Brenke, the economist, said: "This is becoming a ritual. The unions will demand a lot, the employers will insist on a much smaller increase, and a compromise will be found."

The Federation of German Trade Unions is also seeking a statutory minimum wage of €7.50, or more than $10 an hour. Michael Sommer, the federation's chairman, said a million Germans were on "starvation wages."

But Merkel's party opposes the demand. "Minimum wages do not create jobs but rather destroy jobs," said Ronald Pofalla, general secretary of the Christian Democratic Union.

source

I thought this was interesting...thoughts?

quaist · 05-02-2007, 01:27 PM

Well, that's definitely great news!

I hope this boost is going to be stable, because people seemed to get a bit uncomfortable with Hartz IV, lately.

elisheva · 05-05-2007, 10:08 PM

Quote:

Originally Posted by quaist (View Post)

Well, that's definitely great news!

I hope this boost is going to be stable, because people seemed to get a bit uncomfortable with Hartz IV, lately.

Hartz IV? What's that? *feels ignorant*

Indian Summer · 05-05-2007, 10:13 PM

It's a social security/unemployment reform plan, from what I understand. If you're interested, here's the Wikipedia info.

elisheva · 05-05-2007, 10:23 PM

Thanks! Interesting to know more

peytonshilarie · 05-07-2007, 04:19 AM

Well i live next to Germany in Austria!

It´s the same here this year.. but u wanna know how it´s works... they call the people into AMS (it´s this institution where they find u a job) than u get into a waiting line which can take months.. and when it´s your turn they only show u jobs who aren´t appropariate for u bc your education is something completley different or u just can´t take it bc of your family.. like u have a daughter who is 6 and they give u a job on the other side of the country (Austria is not that big but still it would be a min.12 hour drive)!!

Most of them decline the job so u get called another two times if theres still not the right job for u after the 3 time!! U get kicked out of this system and they don´t call u in again.. bc it´s your own fault (so they say)

Thats how they get the number of unemployed people down.. but that doesn´t mean there are less than before.. they just don´t show up in their files anymore!!

i´m not saying this works this way in Germany but i guess theres not a big difference..

I hope it made sence.. i´m not that good with english

quaist · 05-07-2007, 12:47 PM

Hey peytonshilarie!

I'm from Austria too, from where exactly are you?

Well, I agree with you. From what I've experienced, they sometimes even send academics into AMS courses or give them jobs for which they're just overqualified... Like an attorney works in a supermarket or something like that...

peytonshilarie · 05-07-2007, 02:41 PM

hey quaist

i´m from Vienna.. u?

yeah i know what u mean.. they were trying to send my mom to tyrol when i was like six years old to work in a hotel.. and she was a single mom!!!

they are fkn crazy with that.. but thats how they get the numbers down

quaist · 05-09-2007, 11:58 AM

I'm from Innsbruck.

Yeah, I know what you mean, my mum was a single mother, too.

I wouldn't want to know what the *real* numbers, withouth those sent to AMS courses...

peytonshilarie · 05-11-2007, 12:37 PM

yeah i know what u mean! I think every 2 teenager doesn´t have a job i guess..


Fan Forum > General Discussion > News & Politics > German unemployment below 4 million for first time since 2002