German labor market may need 3 years to recover from COVID-19

Source: Xinhua | 2020-07-23

The German labor market may need up to three years to recover from the coronavirus crisis, head of Germany's Federal Employment Agency Detlef Scheele said on Wednesday.

"It will certainly be by 2022 or 2023 until we get back to normal," Scheele told the German Press Agency (dpa), warning that new virus cases may rebound.

Scheele anticipates unemployment figures to rise even further this summer, also due to seasonal influences. However, the unemployment figure in Germany would not exceed the three million mark in the next two months, he said.

Germany's labor market had been "in good shape" before the coronavirus crisis, said Scheele, stressing that the country's current crisis was virus-related and hardly caused by economic or structural factors.

Currently, 2.85 million people in Germany are registered as unemployed, about 640,000 more than in the same month last year. Although the "massive use of short-time work" has had a stabilizing effect, the German labor market remains "under pressure" due to the coronavirus pandemic, the employment agency noted.

"Short-time work is working, we currently see no signs of a major wave of redundancies," added Scheele.

In Germany's hospitality industry, which was hit particularly hard by the COVID-19 crisis, around 93 percent of all employees were registered for short-time work in March and April, according to the employment agency.

The country's nursing sector, on the other hand, saw no redundancies due to COVID-19, according to Scheele. On the contrary, it remains important to address the shortage of skilled workers that continues to be prevalent in this sector.

Although there are several subsidized work qualification programs in Germany, Scheele stressed that the shortage of skilled nursing staff could not be solved without immigration.