Youth Unemployment in Germany: More a Sham than Success

The Sham: Germany is Successful

There are only three states within the European Union that have a youth unemployment below ten percent. Germany is one of them. In 2011 on average 8.5 percent of the below 25 years-old were registered as unemployed, only Austria and the Netherlands scored better. Why is Germany in such a good situation? After all, the EU is in an economic crisis of which young people suffer especially hard – Europe-wide every fifth young job seeking person is unemployed.

There are two reasons for the low number of unemployed. On the one hand Germany’s economy has been growing since the end of 2009. The GDP growth rate was 3.7 in 2010 and in the past year 3.0. Growth creates jobs and for the past two years the young profited unusually well. For the first time since 2004 the difference between the unemployment rate of those below 25 years and above deceased below three percent.

The Reality: Many Young People are Parked in a System

On the other hand the real scale of unemployment is covered up. Germany is parking many young people in a transition system of vocational schools, further education and skill enhancement programmes. The participants of such measures do not count into the statistics. 320 000 people were part of this system in March 2011, while at the same time 300 000 were registered as unemployed. This shows that the good statistics do not reveal the whole truth. In reality much more then the official 8.5 percent of young people are threatened by unemployment.

This is because the transition system does not guarantee a transition to the job market. “The chance to get a somewhat stable job is very very low”, says Walter R. Heinz, professor at the University of Bremen. In the eyes of Dr. Stefan Sell, professor for social policy at the university of applied science Koblenz, the system is to school like and to distant to what is actually happening on the job market. For many the transition system ends up to be a dead end: “Around 40 percent, that is 150 000, of the teenagers leave the system without being able to begin a proper professional training”, concluded the Konrad-Adenauer-Foundation in November 2011.

Skilled Labour Wanted

The paradox: there are many vacant job positions in Germany. Skilled workers are in demand. In January 80 000 engineer positions were vacant according to the Association of German Engineers (VDI) (The extend of this demand is disputed though). Their president Willi Fuchs believes that Germany will need even more new engineers in the future: “Within the next 15 years half of the current engineers will drop out of the job market”, he told the “Karriere Spiegel”.

However, also in other fields skilled personnel is missing. According to a study of the universities of Bamberg and Frankfurt the “Top-1000-companies” will face difficulties to find employees for one third of all vacancies. The companies have difficulties to find new staff especially in the fields of research and development, as well as IT.

The demographic forecast shows that Germany will need even more young persons for the job market. That is because Germany will lose up to eight million people of the working age until 2030 – “a real danger” to the German economy according to the “Consensual Group on Skilled Labour and Immigration”.

The crux is that only skilled people are able to profit from the economic situation. In contrast people without any training qualification will lose on the job market. They are three times more often unemployed than academics, stay 100 days longer unemployed (264 compared to 177), and had to accept a real wage decrease since 1990. “The low-skilled were unable to profit from the prosperity growth of the past 25 years”, concludes the “Institute for Research on the Job Market of the Federal Employment Agency”.

In general employers expect today higher qualifications and more flexibility of young job seekers. “Especially younger low-skilled people are the real losers of the rising risks on the job market”, professor Dr. Blossenfeld sums up the situation.

Conclusion: Opportunities for skilled Europeans

From a European perspective this means that Germany needs to recruit more high-skilled people from the Member States of the European Union. At least to a certain extent these immigrants may reduce the pressuring need. Therefore, Germany should run “information and advertisement campaigns of intensive scale in European countries”, demands the “Consensual Group on Skilled Labour and Immigration”. Yet, also outside of the EU Germany has backlog demands. From 2007 to 2009 the puny amount of 363 high-qualified immigrated to Germany – while it were 50 times this number to the UK, says Bernhard Lorentz of the Mercator-Foundation.

It seems that in this sense Germany might even profit from the economic crisis in Europe. Applications for German courses are rising in Spain where every second person below 25 years is unemployed. For example, the Goethe-Institute in San Sebastián registered an increase of 25 per cent of enrollments since December 2010. Information requests at the “Central Agency for Foreign Job Markets of the Federal Employment Agency” have been rising too since 2011. Therefore, the agency extended their services to support employers for their recruitment in foreign countries in January 2012.

However, an important pre-condition for success on the German market is a good command of the German language. “Foreigners who do not speak well German will face difficulties”, warns the agency in an information booklet [1]. Only specialists in IT and in some academic fields may have a chance with solely speaking English.

We Europeans may thus also find something positive in this crisis. Missing skilled labour motivates the governments to cut immigration barriers and care more about our fellow European citizens. This on the other hand causes a higher mobility of employees, that a better utilisation of the common market and finally the impact of the crisis may be softened. And along the way Europe turns into the new home for many.