Record Jobless In Germany

The economic recovery so far this year has been neither strong nor stable enough to improve the labour market situation, Klaus Leven, the deputy head of the labour office, explained.

The pan-German seasonally adjusted jobless rate rose to 10.6 per cent of the labour force last month 9.4 per cent in west Germany, 15.5 in the east from 10.4 per cent in September and 9.6 per cent in October last year. On an unadjusted basis, it rose by 18,400 to 3,866,800 between September and October. The news came shortly before the Bundestag, Germanys lower house of parliament, approved government-sponsored tax changes designed to stimulate investment on their second and third readings.

 

It also voted for measures to cut unemployment benefits for people rejecting lower-paid jobs and for the long-term unemployed.

Financial Times

Included in the tax package were measures to encourage company start- ups and controversial proposals to cease levying the wealth tax from the beginning of next year.

It is unclear how far the changes agreed Thursday will become law because the Bundesrat, the second chamber of parliament, dominated by Social Democrat-governed states, is expected to reject the package at the end of this month, forcing mediation procedures.

Thursdays labour market figures were almost totally bleak. Short-time working increased between September and October while the most recent employment figures - for August - showed a sharp seasonally adjusted fall of 55,000 compared with July, reflecting job losses in western Germany.

Leven said the labour market in eastern Germany had developed less unfavourably than that in the west in recent months.

However, the overall situation in the new Lander was much worse. Highlighting the east-west divide, Thursdays seasonally unadjusted statistics showed that the state of Sachsen-Anhalt had the highest jobless rate of 16.8 per cent compared with Bavaria, the lowest, with 6.5 per cent.

The October labour market figures, coming after news this week of falling industrial production and orders in September, increased fears about the strength of Germanys economic recovery and raised the spectre of a further sharp rise in unemployment during the winter.