Germany's unemployment problem

[Menydh]

German unemployment up again in December

Unemployment in Germany rose to its highest level in seven years in December, partly due to changes in the way that the jobless are categorised and benefits are paid, but also as Europe's largest economy seems too weak to create work. The December report showed the total of people seeking jobs reached 4.46 million - not adjusted for seasonal factors. That is 10.8%, an increase from 10.3% in November.

The head of the Federal Labour Office, Frank-Juergen Weise, explained there has been no real improvement over the last twelve months: "The figures are still high given the lack of economic stimulus in Germany in the last year. The result of that is a jobless level that is essentially unchanged, it was high in 2003 and it was high again in 2004." The efforts by Germany's government to spur more economic growth including changing the country's expensive state welfare benefits system have yet to bring results. Economy Minister Wolfgang Clement, visiting a Labour Office building in Cologne, said: "The big change has not arrived yet, the social welfare reforms have just started, so you can't expect immediate results. The latest figures reflect not just the state of the economy, but also those welfare changes."

Clement admits that the figures will not fall much this year. January is likely to be even worse - analysts predict around five million unemployed - as more social welfare recipients change their status and register as unemployed.


http://www.euronews.net/

[Phlegethon]

The official figures are a joke anyway. In reality there are about 12 million jobless people in Germany, more than half of them highly-qualified and university-educated. Plus about 2 million fireigners, 90% of them unskilled and without high school education. Those one Euro jobs will only help axe more regular employment. If you know the price level of Germany you can imagine what living on 345 Euros means. EU eastern expansion has already cut down wages in some sectors from about 7,50 Euro to less than 3 Euro per hour. Working poor like in the U.S. are already a reality here.

An even bigger problem is those who are not eligible for any benefits anymore. I am awaiting the complete collapse of the system by 2006.

[Aeternitas]

Yes, these figures can't be right. I think the official unemployment figure was over 4 million in '98. Schröder promised to reduce it to 3.5 or so. Things have changed since.

[Menydh]

The calculus used for obtaining those figures is often tweaked by governments to suit their short-term interests. It depends on the variables used for the calculus. This is the definition that eurostat gives for Total Unemployment Rate:

Unemployment rates represent unemployed persons as a percentage of the labour force. The labour force is the total number of people employed and unemployed. Unemployed persons comprise persons aged 15 to 74 who were: a. without work during the reference week, b. currently available for work, i.e. were available for paid employment or self-employment before the end of the two weeks following the reference week, c. actively seeking work, i.e. had taken specific steps in the four weeks period ending with the reference week to seek paid employment or self-employment or who found a job to start later, i.e. within a period of, at most, three months.

Read well and you'll see the joke in it. Under this definition, the figures given by eurostat for Germany since, e.g. 1998 are:

1998	1999	2000	2001	2002	2003	2004
9.1	8.4	7.8	7.8	8.7	9.6	9.8

[Phlegethon]

And then add the millions of students (who have to work at least half time jobs but cannot register as unemployed because their occupation is being a student) or those going through "qualification measures".

[Vitor]

It's the anarchic capitalsm rulling...
Germany would be better of without lower wage immigrants...
If there is lack of jobs, Why the immigrants?

I know why...

[Menydh]

Dismantling the Welfare State

by Ignacio Sotelo
El País, 07 January, 2005

On 1st January a new legislation for unemployment benefits came into effect in Germany. After half a century of an extended practice of Welfare benefits and a number of years during which it has been practically frozen, the Welfare State is on a downwards slope. The hard fact which cannot be denied, much as we dislike it, is that the model of the Welfare State has come to an end. It is still difficult to discern the model which will be imposed after the battle which the interested parts are fighting.

The demonstrations during the mondays of last Autumn seemed to be announcing a massive social mobilisation which would take place as soon as the new measures came into force. A 15% of the population wasn't ready to accept a decrease in their incomes under the excuse of creating more employment. It still remains to be seen that this will happpen, beyond whatever efficacy these measures may have in order to bring out to the surface a part of the submerged economy; but it is hard to see oneself forced to work in very basic or phisically tiring activities for a wage which is similar to that which was until now obtained for doing nothing. The fact that there has been no revolt so far --nor there are indications that there might be one-- has amazed a Government which had delayed a long time badly needed reforms for fears of a social revolt. It appeared obvious that if the Government dared to start these reforms it would lose the elections. German public opinion is still amazed that the expected mobilisations have not been carried out. At this point it doesn't sound probable that Kanzler Schröder will lose the next elections, as it was expected only six months ago.

The year 2004 has been for many a "terrible year": natural catastrophes, the Iraq War, Bush re-election. It has also been catastrophic in a very especial way, for the German working class in general; and not just for the non-qualified workers who have to compete inside and outside their own borders with a foreign workforce. Big companies like Siemens have returned to the weekly 40 hours of work under the minimum salary; in other companies the salary supplements for working during the weekends has been suppressed, or they are not paying for working additional hours; the Christmas wage has been reduced to half or completely eliminated; Volkswagen has reached an agreement with the unions to freeze the salaries during the next two years. And these are the general lines throughout Germany. The employer's association is demanding on a daily basis that companies are facilitated the dismissal of their employees; i.e. to eliminate the costs that these dismissals carry and to suppress the co-management (Mitbestimmung) in the big companies, two of the identity banners of the German social model.

How to explain to the employees of the big companies --those in the small companies will have to content themselves with much less-- to accept a continuous worsening of salaries and of working conditions, when the companies benefits have been on the rise since 1993? That without taking into account an inflation of nearly 60% since.
The fact that workmen with a job place don't dare to complain is explained mainly by the real effects (and in special the imagined effects) of globalisation. The delocalisation of work places to countries with much lower salaries increases at the pace of the German investments abroad, while those which stay in Germany decrease: from a figure of 90,000 million euros during the second half of 2000, they have moved to 71,000 millions during the first half of 2004. And that despite the Government not having enforced other employment policy but to increase companies benefits (lowering taxes, salary moderation), the only policy deemed adequate for a growth of investments and, with them, a rise in employment.

More than the realized delocalisation which brings many problems, what is disciplining the workers is the threat of carrying them out if the unfavourable conditions imposed by the companies are not met. To answer this provocation with a strike, the main weapon for workers, would mean a step forward to the much feared delocalisation. If the employees of the big companies are terrified --Opel has announced that they will cut 12,000 work places in Europe, most of them in Germany-- it is no surprise that the lower strata, much less organized, stay quiet. Everyone abandoned to his own fate, fear is without a doubt the best tranquilizer.

[Phlegethon]

And the new unemployment benefit reform which is simply a reduction to welfare level lumps people who have worked for 30 years and always paid their taxes and pension shares in the same category with punks, hippies, Turks and other worthless scum who have never worked a single day in their lives, dropped out of school and lived on welfare exclusively. Expect some massive unrests soon.

[Ederico]

Such "reforms" will make way in other European countries with a probability of 100%. The Government in Malta is already planning Education, Pension, and Health "reforms", all aimed at reducing and limiting the Welfare State.

I have mixed feelings on such processes, on one side I know that the Welfare State invites cases of abuses from individuals of all Socio-Economic Classes, but most specifically, from the lower and ignorant ones. On the other hand the move away from Social Security and the Welfare State could be an open invitation to the fostering of Socio-Economic Misery for significant sections of the populations.

What are your opinions?

[Zyklop]

I recently read an article about how Turks now advise their countrymen not to immigrate to Germany anymore because of the crumbling social system. Doesn´t matter though, because those who already are here surely won´t leave voluntarily.

Anyway, the faster this Republic collapses the sooner people will abandon multiculturalism and its supporters.

[Phlegethon]

It may come sooner and heftier than we all expect at this time.

[Ekhi]

German unemployment has passed the symbolic five million mark. It is the highest recorded level since 1933. Official figures reveal 5.

[ Full Article ]

[Timo]

5 million Germans jobless? First seperate the ethnic germans with immigrants and asylum seekers. Then one takes the immigrants who have jobs, kick them out of the country (along with the rest), and give their jobs to germans. Put a halt to immigration and asylum. This would reduce the number of unemployed Germans by a big number.

[Menydh]

Deutsche Bank riles politicians

Frankfurther Allgemeine
February 11, 2005

Deutsche Bank could have saved itself a lot of trouble if it had not held its news conference a day after the Federal Labor Office announced a postwar record in unemployment. Coming on the heels of a report of more than 5 million jobless people, the combined announcement of soaring profits and massive job cuts on Feb. 3 prompted politicians to lash out at what they saw as Deutsche Bank's anti-social behavior.

Deutsche posted an 87 percent increase in net profit to €2.5 billion ($3.22 billion), and said it would cut 6,400 jobs and create 1,200 new positions in low-wage countries. Deutsche Bank Chairman Josef Ackermann hopes the staff cuts will help the bank attain its goal of a 25 percent return on equity and boost its market capitalization in international comparison, where Deutsche is currently ranked only in the low 20s.

The share of job cuts affecting Germany - 1,920 in all - had been known since December. Nonetheless, politicians from different parties and trade unionists used the opportunity of various political events and media interviews this week to condemn the plans.

”When you make multibillion profits, but announce 6,000 layoffs at the same time, then that is tasteless, inept, unacceptable, and must be criticized,” Edmund Stoiber, the premier of Bavaria and head of the Christian Social Union, said on Wednesday.

Others used even stronger words, with Ludwig Stiegler, the deputy leader of the Social Democratic Party's parliamentary group in Berlin, speaking of a trail of blood left behind by Ackermann who has supervised the shedding of 20,000 jobs since he assumed his position in May 2002.

Economics Minister Wolfgang Clement called on companies to end their staff cuts. ”The earnings situation of Germany's internationally active companies is better than it has been for a long time.

Particularly in light of our terribly high unemployment, managers should accept their social responsibility for Germany, the place where their companies have grown to their current size and strength,” the minister told Berlin newspaper Tagesspiegel.

Jürgen Peters, the head of the IG Metall union, expressed a similar message. ”Profit maximization at the expense of the public is a betrayal of our society. Such companies should be ostracized,” Peters told Bild daily this week. He accused Deutsche's management of callousness and called on the government to tighten regulations governing corporate layoffs.

Several Social Democratic politicians called for a boycott of Deutsche Bank branches to protest the job cuts. Andrea Ypsilanti, the leader of the Social Democrats' parliamentary group in the state of Hesse, home to Deutsche's Frankfurt headquarters, suggested that Deutsche Bank customers should switch to a rival public-sector savings or cooperative bank.

In an e-mail to employees, Ackermann defended Deutsche's restructuring plans as a necessary measure to boost the bank's competitiveness. ”Deutsche Bank is focusing on its profitability and the continuous strengthening of its market position, also by boosting its share price. We see no alternative to this,” the chairman wrote to the bank's 65,000 employees.

Germany's central bank rallied to Deutsche's side. ”There should be nothing wrong about a bank making a profit that allows it to catch up with the first league internationally,” Bundesbank board member Edgar Meister told the Financial Times Deutschland. However, Meister added, Deutsche should have communicated the planned measures better.

Michael Denzin, a Hesse parliamentarian for the Free Democrats, warned that politicians must not attempt to influence companies' business policy directly or indirectly. Wolfgang Gerke, a renowned economics professor, accused Deutsche's critics of populism and recommended that the bank sue these politicians for damaging its image and its business. ”Politicians should be made liable for their actions,” Gerke told the News newspaper in Frankfurt.

Deutsche Bank is not the only German company that is posting strong profits but trimming its workforce. Insurance giant Allianz nearly tripled its profit in 2004, but reduced its staff by 17 percent. Pharmaceuticals group Schering reported 13 percent higher earnings for 2004 but plans to cut 2,000 jobs. And Siemens announced a big leap in earnings and plans for drastic job cuts in its struggling communication technology division in late January. Unlike Deutsche, however, the Munich electronics group let a day go by between the good and the bad news.


[source]

[Timo]

Originally Posted by Mynydd

Deutsche Bank is not the only German company that is posting strong profits but trimming its workforce. Insurance giant Allianz nearly tripled its profit in 2004, but reduced its staff by 17 percent. Pharmaceuticals group Schering reported 13 percent higher earnings for 2004 but plans to cut 2,000 jobs. And Siemens announced a big leap in earnings and plans for drastic job cuts in its struggling communication technology division in late January. Unlike Deutsche, however, the Munich electronics group let a day go by between the good and the bad news.

This is a common capitalistic practice inorder to save profits for their share-holders. It is due to a bad economy. If it was good, you would see them both expanding (there by making jobs) and making profits. Instead they must shrink themselves in order to stay in "the black" and not go into "the red".This is just a small thing (though I admitt, not to the people now without jobs) in the grand scheme of Germany's overall economy. It is in such bad shape that it forces these companies to keep cutting jobs in order to be profitable, because they can't afford to hire the same number of people. How much longer will this go on? I fear that this is only the begining unless drastic steps are taken. The current welfare and socialist system in Germany is a large problem for economic growth, so is taxes. I am not a great economist, but I know when people keep more of what they earn then spend more, and that goes to companies which grow to create more jobs. And those people which jobs will go to spend their earned money - it is a repeating cycle. Yet when you tax the people and steal their money (that is what taxing is - taking by force and threat) and then take the money and distribute it to people who didn't earn it, it creates a welfare system. This system, by it's very nature, condemns success and rewards failure. This is not a system which is profitable nor good for an economy. Better have the less fortunate earn their way through merit, than to be given it by unwilling persons, from whom the money was stolen. I could go on, about the economic systems currently, and the stupity behind them... but that rather belongs in an economic forum.