Job miracle

In comments defying the continuing economic crisis, Martin Wansleben, head of the German Chambers of Industry and Commerce (DIHK), this week predicted a speedy upturn in German industry.

"We're almost experiencing a job miracle," he told Passauer Neue Presse newspaper, alluding to Germany's post-war 'economic miracle.'

Wansleben's statement goes even further than that of his colleague, DIHK chief economist Volker Treier, who said earlier in the week that German industry would be able to scale back its Kurzarbeit or “short-time work” scheme this year. Treier told the Bild newspaper that some 90 percent of workers put on reduced hours during the financial crisis would be back in full-time employment in the foreseeable future.

Wansleben expects more. "Redundancies will not only stop, our prognosis for this year even predicts a plus of 100,000 workers this year," he said. "There are new jobs already being created, particularly in the IT, health, aviation and chemical sectors."

Successful short-time work scheme

But some industry leaders expressed caution about Wansleben's optimism. Gustav Horn, director of macroeconomics at the Hans Boeckler Foundation research center believes that it is too early to say. "I think that figure is a bit exaggerated," he told Deutsche Welle. "We're in the middle of an economic cycle, and we still have the reduced hours regulation."

But other research institutes are more optimistic. "No, I'd agree with Mr. Wansleben," said Steffen Heinzel of the Munich-based Institute for Economic Research (IFO). "We're already seeing a steady increase in the number of jobs in the second quarter of this year. But there is a certain need to adapt to the market first."

Heinzel agrees with Horn that the short-time work measures are key, but believes other factors are encouraging. "The reduced work hours need to be scaled down first. Then job capacity can be re-tuned," said Heinzel. "But the commissions situation is definitely improving."

The IFO researcher warned that the government's short-time work system - where companies only pay their staff the hours they actually work and the government picks up the bill for their social welfare contributions - needs to be handled with caution in the next few months. "It shouldn't be implemented for too long," he said. "And I certainly don't think it should be extended, because you run the risk of subsidizing companies with flawed structures."

Europe comparison

Since German industry is also substantially dependent on exports, its health is dependent on external factors, particularly in Europe. "We've just seen the whole of Europe go in for a policy of saving," said Horn. "I don't believe it will be that easy."

But Heinzel believes that while lasting success remains a way off, German workers are in a very good position. "We can see that the German job market is extremely competitive," he said. "This is partly because wages have not been increased exorbitantly."

No new blood

Wansleben did express concern about the lack of new blood in the workforce. Up to 50,000 apprenticeship positions were unfilled in 2009 within the DIHK alone. "Even in the crisis year 2009, one in five businesses could not fill all their training positions. In 2010, even more places could stay unfilled."

This came a day after new figures showed that Germany's school system was failing to train young people to an adequate standard for these empty positions. An education ministry reported revealed on Wednesday that 17 percent of young Germans aged between 20 and 30 have no vocational qualification and are no longer in the education system. This represents over 1.5 million people.

But Horn believes that the shortfall in filling training programs is partly down to demographics. "We can see that a couple of relatively child-free generations are having their effect on the job market," he said, pointing out that this also means that unemployment is relatively low.

Author: Ben Knight
Editor: Sonia Phalnikar