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German Unemployment at 1990 levels

onthebottom

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From the BBC this time ;-)

Germany nears 1990 jobless level

German unemployment rose for the 11th consecutive month in December - making the year's average jobless total the highest since reunification.

The seasonally adjusted jobless total rose a higher than expected 17,000 to 4.483 million, the Bundesbank said.

Allowing for changes in calculating statistics, the average number of people out of work was the highest since 1990 - or a rate of 10.8%.

Bad weather and a sluggish economy were blamed for the rise.

The increase "was due primarily to the onstart of winter", labour office chief Frank-Juergen Weise said.

Reform worries

Unadjusted, the figures showed unemployment rose 206,900 to 4.64 million - with many sectors such as construction laying off workers amid bad weather.

"The three years of stagnation in the German economy came to an end in 2004. But the upturn is still not strong enough" to boost the labour market, Mr Weise added.

News of the rise came as government welfare reforms came into force, a move that is expected to see unemployment swell still further in coming months.

Under the Hartz IV changes, the previous two tier system of benefits and support for the long term unemployed has been replaced with one flat-rate payout.

In turn, that means more people will be classified as looking for work, driving official figures higher.

'Nasty' news ahead

"Be prepared for a nasty figure for January 2005, about five million unemployed on a non-seasonally adjusted basis," warned HVB Group economist Andreas Rees.

But he did add that the numbers should "subside" throughout the year, to remain near 2004's level of 4.4 million jobless.

"I don't expect a strong and lasting turnaround until 2006," German Economy minister Wolfgang Clement said.

By 2010, however, the Hartz IV reforms should help cut the average jobless rate to between 3% and 5%, he added.

Europe's biggest economy has been too weak to create work as it struggles to shake off three years of economic stagnation.

In recent months companies such as Adam Opel - the German arm of US carmaker General Motors - and retailer KarstadtQuelle have slashed jobs.

.....

Does everyone else see the correlation between socialist work rules and high unemployment?

OTB
 

onthebottom

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yychobbyist said:
And yet Germans did awfully well under Helmut Schmidt in the 1980s and he was the leader of....the same party as Herr Schroeder. Sure, there is a correlation between many things in life but what I'm proposing is simple: what you've posted is an example of nothing more than a normal economic cycle.
Countries with more socialist work rules have higher systemic unemployment. Look at the big economies in Europe (take out the UK because they have a much more market oriented labor system) and you'll find unemployment rates 50 - 100% higher that the US. Look at these rates over time and you'll find the same thing.

OTB
 

Magister

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onthebottom said:


News of the rise came as government welfare reforms came into force, a move that is expected to see unemployment swell still further in coming months.
People on welfare weren’t being counted amongst the unemployed? Is there a standard international methodology for measuring unemployment, or is Germany just trying to distort the already abysmal figures to their advantage? I’d be interested in hearing to what extent the unemployment figures from various countries are comparable.
 

someone

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Re: Re: German Unemployment at 1990 levels

Magister said:
People on welfare weren’t being counted amongst the unemployed? Is there a standard international methodology for measuring unemployment, or is Germany just trying to distort the already abysmal figures to their advantage? I’d be interested in hearing to what extent the unemployment figures from various countries are comparable.
In Canada, to be counted as unemployed, you must satisfy one of the following:
1. Be without work but made an effort to find a job within the previous 4 weeks.
2. Waiting to be called back to a job from which you have been laid off.
3. Waiting to start a new job within the next 4 weeks.


Thus, as long as someone on welfare is reports (when randomly contacted during the monthly Canadian labour force survey conducted by Stats Canada) that he is meets the above, he/she would count as being unemployed. Of course some are on welfare for disability and other reasons that means they would not meet the above definition.

Most countries has similar definitions but there are still problems comparing unemployment rates. For example, I understand that it used to be the case that Sweden required anyone receiving EI benefits to be in a job training program Thus, they were technically not looking for work and thus, not unemployed. I don’t know if it is still true.
 
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