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Short-lived Job Joys for Germany's East

Economics experts say the government's latest call for more state-funded temporary jobs in coming months, is not more than occupational therapy. The opposition says it is election campaigning.

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Occupation therapy for Germany's jobless?

It was reason to exult for Germany’s opposition: Labor Office head Florian Gerster announced an increase in state funded temporary jobs for Germany’s easern states, breaking his pledge to reduce them shortly after he was called to office two months ago.

A "confession of failure", conservative chancellor candidate Edmund Stoiber called Gerster’s decision, following Union leader Friedrich Merz, who said it was a "desperate deed" by the red-green coalition to boost the east German labor market before the elections.

Less than two months ago, Gerster (photo)showed his discontempt for so-called ABM jobs - state subsidised employment - which are limited to one year.

Bundesanstalt für Arbeit in Nürnberg Florian Gerster

But as September 22 nears, the German government is getting desperate to improve Germany’s job situation – which reached an all-time low in May, with unemployment surging by 60,000 to 4.042 million.

In addition, unemployment is particularly high in Germany’s east, almost double the 8 per cent in the west.

Gloomy outlook

Gerster justified his call for more state funded temporary employment measures with Germany’s trailing economy and the situation of the labor market in the east. Indeed, the outlook is gloomy, as economics experts forecast no upswing for the coming year.

Only in 2005, they say, will the east German economy prove competitive to the west. Therefore, it may seem, is an artificial boost to the labor market necessary.

But German governments have fallen into this trap before.

Short-lived job joys

Four years ago, the conservative government attempted in embellishing labor market numbers, at least on paper. Within a blink of an eyelid, the then economy minister Norbert Blüm made hundreds of million of marks available for the funding of pre-election temporary emploment measures – on the condition that these were spent during the election year.

The result was that thousands found new jobs, improving emploment statistics in time for the election. But the joy of work was short-lived.

Within a year, those lucky to have found a job under Kohl were soon back on the dole. And in the end, these measures did not even help Kohl back to power.

Occupation therapy

ABM is long seen as a form of occupation therapy with experts saying ABM measures are among the worst methods of improving employment on a long-term basis.

As ABM jobs are tied to work which lies in public interest, they may serve social security and city purses for a year. But they do not help the educated and trained to work in their specific professions and to futher develop their qualifications, experts say.

Recent surveys have shown that those employed under ABM tend to stop looking for jobs in their professions and find themselves all the more at a loss when the temporary agreement peters out.

In addition, public services such as kindergardens, which get state subventions of up to 75 per cent for the employment of job seekers, have become increasingly dependant on the help of ABM jobs.

Change in tune

Shortly after his nomination as head of Germany’s Labor Office earlier this year, Gerster made a show of disapproval of ABM-measures, saying these should be drastically reduced.

It is therefore no surprise that opposition and economics experts see Gerster’s change in tune as an attempt to touch up unemployment statistics in the run-up to the elections.

Red-green has vehemently warded off any accusations, saying if they had wanted they could have reduced unemployment with ABM measures long ago.

But economics expert Bert Rürup told the Berliner Zeitung he could not rule out that the elections had played a role in the governmnent’s decision to expand ABM.

In addition, Herbert Büscher from the Institut of Economics Research said ABM was only an "employment of sorts", and that the government’s announced measures were a way of touching up this year’s results.

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