Corona crisis: More long-term unemployed under 35, eternity risk increases

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In the years of the boom, the Federal Republic of Germany made impressive progress on the labor market.

This becomes particularly clear when one looks at the group of the weakest: the long-term unemployed.

This includes everyone who has been without a job for a year or more and therefore has a hard time getting back into the world of work.

The number had dropped to a good 700,000 in March 2020.

That was a far cry from the depressing levels reached in the 2000s.

At its peak, Germany had almost 1.9 million long-term unemployed at the time.

But now there is a worrying trend reversal in the pandemic.

In February the symbolic threshold of one million long-term unemployed was exceeded, for the first time since May 2016. Corona then exacerbated the situation.

Experts therefore assume that the current peak of 1.03 million has not yet been reached.

Because only in April and May those who lost their jobs at the beginning of the crisis and couldn't find a new one because of the tense situation will appear in the statistics for the first time.

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"This should increase the number of long-term unemployed by at least another 100,000 people," says Bernd Fitzenberger, Director of the Institute for Employment Research (IAB) of the Federal Employment Agency, WELT AM SONNTAG.

The economist Volker Wieland predicts: "1.3 million by the end of the year would not surprise me."

This means that long-term unemployment, with its harmful consequences for the state and those affected, is once again a problem.

Because even if the economy should recover this year: Long-term unemployed people in particular typically have a hard time getting back into the labor market.

There is a threat of a base effect that Germany has experienced several times over the past few decades: after every major economic crisis, the number of those who did not make it back to the labor market grew.

Not only do high numbers make a difference on paper, they are a real problem.

Anyone who is without a job for a long time loses important skills.

Everyday routine is missing, professional knowledge is out of date, and self-confidence suffers.

And it will be correspondingly more difficult to gain a foothold in the labor market again.

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The situation is particularly dire for the poorly educated.

It is not just the pandemic that is affecting the business world.

A number of industries are struggling with enormous structural upheavals.

Helper jobs in particular are lost.

The stationary retail trade, for example, is facing increasing online competition.

But industry is also affected: "Even if it masters structural change, for example towards e-mobility in the automotive sector, it is not clear whether the same number of workers will be needed in industry as before," says Wieland.

The federal government has obviously recognized the problem.

This shows the answer to a small request from the FDP, which WELT AM SONNTAG has.

The government therefore expects that “in the long term, the employment opportunities of low-skilled workers will also deteriorate due to the general structural change”.

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This was accelerated by the pandemic in some sectors.

"In order to prevent long-term unemployment from becoming entrenched, it is therefore important to support qualification, enable professional reorientation and thereby increase individual employment opportunities."

That sounds obvious, but how successful will it be?

So far, as the government's answer reveals, very few long-term unemployed people have taken part in further vocational training: last November there were just 13,500 people.

That is only 1.49 percent of the long-term unemployed, criticizes Pascal Kober, the social policy spokesman for the FDP parliamentary group.

He sees a “complete imbalance in the system”: Too much is being talked about distribution issues and too little about integration and qualification, he says, referring to the debate about Hartz IV.

In fact, the SPD, the Greens and the Left - to varying degrees - want to get away from this last social safety net, which, in addition to promoting, also focuses on the demands of those affected.

The goal of the parties: sanctions - which threaten those who reject funding measures or job offers - either reduce or abolish entirely.

Beate Müller-Gemmeke, labor market expert for the Greens, also criticizes the government in very specific terms for how it has dealt with the consequences of the pandemic for the labor market so far: The government remains inactive, and a significant strengthening of labor market promotion is necessary right now.

As an example, she cites the “social labor market” - a project in which people find employment in subsidized jobs after at least two years without employment.

Such instruments need to be made more flexible so that more people can benefit, she says.

Experts are particularly alarmed that, of all people, the number of long-term unemployed among younger people under the age of 35 has recently increased at an above-average rate.

According to Ronald Bachmann from the RWI Leibniz Institute for Economic Research, the current upheavals in the education system also mean that there is a risk that more people will have poor or no professional training in the future.

“These are the long-term unemployed of tomorrow who will fundamentally have extreme difficulties on the job market,” he warns.

IAB boss Fitzenberger suggests promoting young long-term unemployed specifically through an education bonus.

This should be paid to everyone who completes a longer certified qualification.

"It would be ideal if as many of these people as possible could be won over to training in a profession with a shortage of skilled workers - for example in nursing," he says.

He also advocates temporarily taking over the social security contributions for the long-term unemployed so that companies can hire more quickly.

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Of course there is hope that things won't turn out so bad after all.

Economist Wieland makes a comparison with the years 2014 to 2019. "If Germany were to manage to achieve similar economic growth again, the number of long-term unemployed could fall back to the level before the Corona crisis in a few years," he says.

But the economy is not certain that it will really work.

Fitzenberger also expects rather slow progress.

Reaching the level of March 2020 alone should "take at least two years," he estimates.

Provided that a lot is done for new hires - and the corona crisis comes to an end in the second half of the year.