In the corona shock, short-time work was the most important factor

In the corona shock, short-time work was the most important factor

The corona crisis has so far had comparatively little impact on the labor market in germany.

Although the number of people in work fell more sharply between april and june than at any time since reunification, it remained well below the economic slump in terms of its dimensions.

According to figures released by the federal statistical office on tuesday, 44.7 million people were employed in germany in the second quarter of this year, 1.3 percent fewer than a year earlier. Gross domestic product, however, slumped by 11.7 percent compared to the same quarter of the previous year, adjusted for prices.

The decline in the volume of work, i.E. The total hours worked by all employees, was far greater than the decline in the number of employees. According to calculations by the institute for labor market and occupational research (IAB), it fell by 10.0 percent to 13.3 billion hours compared to the same quarter of the previous year, primarily due to the intensive use of short-time work. Each individual still accounted for 297.3 hours of work. This was 8.8 percent less than a year earlier.

According to IAB calculations, the productivity of the remaining employees fell by 1.7 percent during the corona crisis, less than during the financial crisis of 2008/2009.

"The reduction of working hours with the thick chunk of short-time work was the essential way of adapting to the changed situation", says IAB economist enzo weber. "Short-time allowance is a tried-and-true remedy, especially in the event of an external shock that you want to overcome together with your own people. The business model is intact at most companies. The corona pandemic can thus be seen as a prime example of short-time work for large sections of the economy."

The wage replacement benefit from the funds of the federal employment agency was made significantly more attractive with the takeover of the full social security contributions and increased rates of pay. There had certainly also been windfall effects in companies where jobs had also been held in other ways, weber said. "But that has to be accepted, especially since the first few weeks were also about maintaining the liquidity of the operations."

Currently, politicians are discussing an extension of the maximum payment period from 12 to 24 months. IAB expert advocates extending short-time allowance to 24 months. "But because this carries a high risk of delaying the transformation of the economy, it must be combined with the qualification of employees."

The IG metall union has called for a four-day week to save jobs in the metal and electrical industry in the long term. "The four-day week was the answer to structural change in sectors such as the auto industry. This is the way to keep industrial jobs instead of writing them off," the union’s first president, jorg hofmann, had said. He had demanded a "certain wage compensation" for the reduced working hours, so that the employees could afford it.

The president of the german institute for economic research (DIW), marcel fratzscher, rejects a wage adjustment. This effectively means significant wage increases and thus rising costs for companies, he told the "passauer neue presse" (tuesday). "There is nothing wrong with a four-day week, with flexible working hours, if that is what employers and employees want. The decisive factor is always the question of wage compensation."He expects that there will be no wage increases in many industries in the coming years.

IAB economist weber also considers a four-day week with full wage compensation unrealistic. Nevertheless, the work could be better distributed. "In our estimation, there will be no less work in the future than there is now. We should not lower the upper limit of working hours for everyone, but open up more options for the individual. There are many who want to work a little less. But there are also many who, conversely, want to do more than they currently do."

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