The economic consequences of the coronavirus crisis are increasingly becoming apparent: more than 300.000 people in Germany registered as unemployed in March alone, and the number of people put on reduced working hours reached a record 10,1 million. 

Coronavirus puts German job market under pressure

The coronavirus crisis is now raging through the German job market with full force. “The coronavirus pandemic is likely to lead to the worst recession in Germany in the post-war era,” said the head of the Federal Employment Agency (BA), Detlef Scheele this week. “This also puts the job market under a lot of pressure.” 

According to figures released by the BA this week, unemployment and underemployment in Germany rose in April, for the first time ever in the post-war period, while the number of employees working on reduced hours soared.

Unemployment in Germany rose in April for first time since WWII

The figures show that the number of people claiming unemployment benefits rose by 308.000 in March, taking the overall total to 2,644 million. Economists had only expected an increase of 95.000 people. Overall unemployment, adjusted for seasonal influences, rose by 0,7 percentage points to 5,8 percent. 

In April 2020, only 626.000 vacancies were registered with the employment agencies, 169.000 fewer than a year ago. Seasonally adjusted, the number of vacancies dropped by 66.000. “The demand for new employees has literally collapsed,” Scheele said.

10,1 million employees registered for Kurzarbeit

In March and April, a total of 751.000 companies registered 10,1 million employees for Kurzarbeit. Under this scheme, employees who are placed on shorter hours by their employers have their salaries topped up by the government, preventing them from losing their jobs. 

The final value is likely to be lower than 10 million, since companies are able to register for Kurzarbeit as a precaution and then decide against it. Nevertheless, the numbers are record-breaking, exceeding by far the 3,3 million applications received during the financial crisis in 2009. 

The federal government said in its spring forecast on Wednesday that the German economy would not recover from the coronavirus pandemic until the year after next. Minister of Economic Affairs Peter Altmeier said that he expected the level of the previous year to be reached again in early 2022. The low is likely to be reached in the current quarter.