What the federal government is doing against mass unemployment

The corona crisis has hit the German labor market. Today the employment agency publishes new figures. What is the federal government actually doing in the fight against unemployment??

By Kai Kustner, ARD capital studio

It is one of those sentences that Federal Labor Minister Hubertus Heil could print out in large font and hang over the desk. So much does he determine the actions of the SPD politician in the Corona crisis: "Short-time work is expensive. But unemployment would be much more expensive for our society."

With short-time working, the federal government undoubtedly took a very effective instrument out of its toolbox fairly early on, namely in March, to prevent a massive slide of employees into unemployment. Even the opposition sees it that way. "It is an absolutely proven crisis instrument that is now being copied internationally. There is a non-partisan consensus on this," says the labor market policy spokesman for the FDP parliamentary group, Johannes Vogel, at the ARD capital studio. And the AfD MP Ulrike Schielke-Ziesing also says: "It is necessary, it is absolutely necessary."

Never before as much short-time work as today

The EU is also copying the German model (with the program called ‘Sure’) in the Corona crisis by promoting short-time working through billions in loans. But even if SPD labor minister Hubertus Heil repeats his mantra so often that unemployment would be much more expensive – short-time work also costs money. A lot these days: Never in the history of the Federal Republic have companies sent so many people on short-time work as they do today.

"Now it is the case that the federal government has to help the unemployment insurance with tax subsidies", explains the deputy leader of the Left Party, Susanne Ferschl. From calculation scenarios of the Federal Employment Agency, which are available to the ARD capital studio, it follows: A previously existing and almost cosiness exuding financial cushion of almost 26 billion euros should not only disappear completely this year, the authority will probably inject billions of dollars Need covenant. If you add the falling tax revenues, the AfD MP Schielke-Ziesing believes that this is a dangerous mixture: "We are heading for a really big crisis."

FDP: Don’t just keep jobs, but create new ones

The FDP does not paint such a drastic picture. But the liberal MP Johannes Vogel really thinks the short-time work allowance, which has been tried and tested in Germany for decades, is not sufficient in his view. Vogel believes that the government is concentrating too much on preserving old jobs and too little on creating new ones. And suggests:

"With the sustainable creation of completely new jobs for a period, for example until the end of the year, to take over the social security contributions. This makes it more attractive to create new jobs."

It is already evident that the Corona crisis will hit the German economy much harder than the financial crisis from 2009. The number of short-time workers today is gigantic – compared to about a decade ago. However, it is not yet possible to reliably predict how dramatic the situation will be for the labor market as a whole, and how threatening the situation will be for employees. At the moment it looks as if the Germans would get off at least somewhat lightly in European comparison – which is, however, very little consolation.

This post ran on June 3rd, 2020 at 7:03 am on B5 aktuell.

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