Highest unemployment rate in Germany since 2015

According to the report of the international group Tasnim news agency, according to the German Handelsblatt newspaper, based on the study of the institute Germany’s economy, the consequences of the economic crisis will be revealed this year.

This report continues: The economic recession in Germany is increasingly affecting the labor market. Unemployment is expected to average 2.8 million this year, the highest level since 2015, according to a study by the German Economic Institute (IW) released to Reuters on Friday. “Holger Schafer”, a labor market expert of the German Economic Institute, said: “Last year, despite the recession, the labor market was quite stable.” But this year we feel the consequences of the economic crisis more strongly.

This issue will be more obvious in the labor market. In this analysis, it is stated: The employment plans of the companies do not show any growth for the rest of the year. Some leading indicators also provide little reason for optimism. In March, the number of reported job vacancies fell to their lowest level in five years, and even with the favorable economic conditions, we can expect at best a modest increase in employment this year. As the baby boomers are reaching retirement age, there is a need for replacements and the skills gap is hard to close. Finding a suitable job worsens, as a result, unemployment continues to rise. IW, which has close ties with employers, explained: “In the fourth quarter, conditions are expected to even exceed the crisis level in the 2020 Corona epidemic.” An annual average of approximately 2.8 million unemployed and a rate of six percent can be predicted. However, this is lower than the peak in 2005, when almost 4.9 million people were unemployed and Germany was considered the sick man of Europe due to its “tight labor market”.

Other economic research institutes In their recent spring report to the federal government, they expected fewer than 2.7 million unemployed in 2024. Last year, the German economy shrank by 0.3 percent. Although fewer goods and services were produced, the number of employed people increased by about 0.7 percent.

The number of hours worked also increased by 250 million hours, or 0.4 percent. IW experts attribute this, among other things, to the fact that companies tend to retain skilled workers even if they cannot currently work at full capacity. However, companies are likely to be able to sustain these conditions only during short-term economic dry spells. As the weak phase continues, it is increasingly likely that the workforce will have to be retrenched, as the continued decline in productivity undermines firms’ competitiveness. Unemployment is not enough. The reason is high net migration. In early 2022, there was a net migration of 1.5 million people, including one million refugees, from Ukraine to Germany. In 2023, another 650,000 people migrated net in the first eleven months.

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