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What the federal government is doing against mass unemployment

Posted by Otto Knotzer on June 04, 2020 - 8:17am

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 doing in the fight against unemployment?

By Kai Küstner, ARD capital studio

It is one of those sentences that Federal Labor Minister Hubertus Heil could print out in large fonts 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."

The federal government undoubtedly got out of the toolbox quite early with the short-time work, namely in March, to prevent workers from falling massively into unemployment. Even the opposition sees it that way. "It is an absolutely tried-and-tested crisis instrument that is now being copied internationally. There is a non-partisan consensus," says Johannes Vogel, the ARD capital studio spokesman for the FDP parliamentary group, and AfD MP Ulrike Schielke-Ziesing also says: "It is necessary, it is absolutely necessary."

Never as much short-time work as today

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

 

 

"It is now the case that the federal government has to support unemployment insurance with tax subsidies," explains deputy parliamentary group leader of the Left Party, Susanne Ferschl. The arithmetic scenarios of the Federal Employment Agency, which are available from the ARD capital's studio, show that a financial cushion of almost 26 billion euros that has existed so far and is almost cozy is not only likely to disappear completely this year, the authority will probably be injected with billions of dollars Need covenant. If one takes the breakdown of tax revenue, the AfD deputy Schielke-Ziesing sees a dangerous mixture: "We are heading for a really big crisis."

 

 

FDP: Not just maintaining jobs, but creating new ones

The FDP does not paint such a drastic picture. But the liberal MP Johannes Vogel really finds the short-time work allowance that has been tried and tested in Germany for decades - from his point of view it is not enough. Vogel believes that the government focuses too much on maintaining old jobs and not enough on creating new ones. And suggests:

"When it comes to the sustainable creation of completely new jobs for a period, for example until the end of the year, to take over 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 onwards. The number of short-time workers today is huge - compared to around a decade ago. However, it is not yet possible to reliably predict how dramatic the situation for the labor market as a whole will become, or how threatening the situation will be for employees. At the moment it looks as if the Germans will at least get off lightly compared to other European countries - which, however, is a very weak consolation.

Otto Knotzer thank you for sharing
June 4, 2020 at 8:33am