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Economic recovery

July 29, 2010

Germany's job market seems to be back on track, according to the latest figures, and new jobs are expected to open up for skilled laborers by 2020. Yet experts warn that short-term contracts threaten stable employment.

Sign in front of the Federal Employment Agency
Things are looking up, according to the BA's figuresImage: AP

Despite a marginal seasonal rise in Germany's unemployment rate, the labor market is getting back on track, according to Germany's Federal Employment Agency (BA) in Nuremberg.

The BA announced a 0.1 percent rise in unemployment for the month of July, raising national joblessness to 7.6 percent.

"The German economy is on the path to recovery. The state of the labor market has continued to improve," said BA chairman Frank-Juergen Weise.

More jobs for skilled workers; outsourcing of unskilled labor

Experts estimate that of the 39,000 residents who began collecting unemployment benefits in July, 10,000 to 20,000 were seasonally-related, mostly students who were finishing school and heading on to university or vocational training programs in autumn.

In June, unemployment shrank in Germany by 88,000 down to 3.15 million.

Another study conducted by the Bertelsmann Foundation predicted a rising demand for engineers and nurses in coming years. They said there will soon be more open jobs than applicants in the fields of research, service and healthcare. The study further predicts that, by 2020, 1.7 million new full-time positions will be created, as well as 820,000 part-time jobs.

By 2020, the demand for university graduates is expected to rise by 800,000 in comparison to 2003. The Bertelsmann Foundation predicts the number for graduates of technical colleges will go up by 1.1 million.

Meanwhile, 800,000 jobs for people with limited or no professional qualifications are set to disappear, and work in construction, mining and clothing sectors will continue to be outsourced overseas.

A division of personnel

The BA also stated that the number of short-term contractual labor positions had steadily increased, accounting for the apparent stabilization of the job market.

A woman holds her head in her hands at a computer
Experts warn that short-term contractual labor damages the job marketImage: PA/dpa

Jutta Krellmann, a labor market expert for the Left Party, warned the federal government that "your cheers over the decrease in unemployment figures ignores the fact that this drop in unemployment is greatly due to contractual labor, which is accelerating the spiral of low pay."

Detlef Wetzel, second in command at IG Metall, also leveled criticism that contractual labor was "driving out more and more stable positions" and creating a work culture of "hiring and firing."

He warned that the use of lower-paid, short-term contracts would divide companies' personnel between those with long-term and those with short-term contracts.

Author: David Levitz (apn/dpa/epd)

Editor: Martin Kuebler