The Economy in Germany

Job Miracle with Blemishes

© Colourbox.com© Colourbox.com

Europeans are surprised, the world is amazed, and experts are seeking explanations. While in many European countries unemployment has risen to ten per cent and more, it has sunk in Germany. Despite the lingering effects of economic and financial crises, in 2012 the Federal Agency for Employment counted the lowest level of unemployment in two decades: 6.8 per cent. What is the truth about Germany’s job miracle? Are German workers living on an Isle of the Blessed? Or has it all been bought with low wages? What opportunities exist for foreign workers and immigrants?

The fact is that the number of employees subject to social security contributions in 2012 is about 29 million. This is more than the boom a decade ago. Their contributions (and those of their employers) finance the social security funds for pensions, health and unemployment. The number of persons employed is over 41 million. This is the highest level since reunification, a German record. The total number of employed people includes, in addition to employees subject to social security contributions, officials, soldiers and family workers. Altogether, they come to 37 million. Add to this about four million self-employed people.

Many work for low wages

© Colourbox.comSo – work for everyone? As always, the devil is in the details: more and more people are working for low wages. According to experts, this is one of the causes of the “job miracle”. The low-paid include both the hairdresser who cuts hair for five euros without social insurance and the warehouse worker subject to social security contributions who works for an hourly wage of nine euros gross. A low-wage, according to the OECD definition, is pay for a full-time employment of 40 hours a week that, at the end of the month, falls below the poverty line. The poverty line, according to the Federal Statistical Office, is 9.40 euros per month (for single people).

In Germany, a total of eight million people earn less than € 9.15 per hour. Since 1995 their number has increased by 2.3 million. Nearly 1.4 million earn less than even five euros hourly wage. These numbers were revealed in a study by the Institute for Work and Qualification at the University of Duisburg-Essen published in March 2012. It included school children, students and pensioners who are employed in a part-time job for a low wage, but subtracting them the number is still 7.5 million. Every other low-wage earner works in a full-time job, which means that, despite a 40 hour work week, he or she cannot earn enough money to live on. Among the low paid are many temporary workers. Their number is currently approaching the million mark; one in three works in an low skills job.

Immigrants and Germans with immigrant backgrounds

© Hubertus Blume - Fotolia.comAt greatest risk of falling into the low wage sector are temporary workers, people without completed vocational training and foreigners. Immigrants and their descendants have participated in total to a lesser extent in the labor market boom than the population without immigrant background. This is the conclusion of Integration Report, Number 9, of the Federal Office for Migration and Refugees. According to the latest available figures, the unemployment rate in this area is about 14 per cent, with the trend decreasing.

After the opening in May 2011 of the German labor market to the new EU accession countries (Poland, Hungary, the Czech Republic, Slovenia, Estonia, Latvia, Lithuania and Slovakia), restrictions on immigration to Germany remain valid only for Bulgarians and Romanians. Workers from these two countries and from countries outside the EU are dealt with by a hitherto strictly applied system that is based on the demand for labor. For such workers to be admitted, they must have a job offer in Germany and no one else, EU nationals or Germans, may have a claim to this job.

But the rules are starting to be relaxed. Since January 1, 2012, Romanian and Bulgarian professionals seeking work in Germany no longer need to prove they have work permits. The same applies to seasonal workers who work up to six months a year in agriculture and forestry, hotels and catering, or fruit and vegetable processing.

Qualified professionals urgently needed

© Colourbox.comThis relaxation is the trend, for qualified professionals are needed. According to a survey of the German Chambers of Industry and Commerce from the end of 2011, more than one third of companies cannot fill short-term vacancies, a percentage corresponding to 1.3 million jobs. Affected are mainly technology-oriented industries such as automotive and electrical engineering, but also the health care industry.

The German government, after much hesitation, has introduced a bill to recognize foreign professional qualifications. In force since April 1, 2012, it sets uniform standards for evaluating the foreign professional qualifications of about 60 professions, such as academic and non-academic health professionals and master craftsmen. The German federal states have announced that they will also change the professional regulations for teachers, pre-school teachers and engineers. Affected by the regulations, according to the estimate of the Federal Ministry of Research, are about 2.9 million people with immigrant backgrounds living in Germany, who obtained their highest professional degree abroad. The Ministry expects approximately 300,000 immediate validation processes. For this too is part of the German “job miracle”: lack of qualified professionals. It represents an opportunity above all for highly skilled immigrants. Opportunities for the less qualified, on the other hand, are rather modest.

Volker Thomas is a freelance journalist in Berlin and director of a press and PR agency (www.thomas-ppr.de).

Translation: Jonathan Uhlaner
Copyright: Goethe-Institut e. V., Internet-Redaktion
April 2012

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