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Germany

Is Germany Cooking The Books On Its (Low) Unemployment Rate?

At a time when much of the developed world is still mired in a major slowdown, Germany’s 6.2% jobless rate is enviable. But by not counting half the unemployed over the age of 58, Germany might not be giving a true picture of its economic health.

Is Germany Cooking The Books On Its (Low) Unemployment Rate?

Worldcrunch *NEWSBITES


BERLIN
– When it comes to the job market, Germans can count their blessings. Unemployment has dropped from more than 5 million to less than 3 million over the past six years. That contrasts starkly with the more than 9% unemployment rates currently squeezing workers in the United States and in many of Germany's European neighbors.

But a closer look shows that the 6.2% jobless rate in Germany does not accurately reflect the employment picture – notably as it refers to the country's 58- to 65-year-olds. The number of registered jobless people in that age group rose -- and the statistics only show half the truth.

According to Federal Employment Agency (BA) figures, in August 2011 there were 291,380 jobless people in the 58-65 age group. Add to that 211,222 "working job seekers' that don't appear in the official unemployment figures because they are temporarily occupied in subsidized jobs programs or in job center training. Were they to be counted, the total number of unemployed would be well over the 3 million mark recently announced by the Nuremberg-based agency.

The BA admits that not all older job seekers are included in the statistics. The agency points out, however, that in 2011, 43% of them are included, a considerable improvement over 2010 (39%) and 2007 (14%).

The reason for the gap in the statistics appears to be procedural. Until 2007, when an unemployed beneficiary turned 58, he could still receive benefits without having to continue looking for a job – and were thus no longer counted as unemployed in the statistics. They also had to agree to retire as soon as they could.

This practice changed in 2007 since it didn't mesh with the government's plan to raise the retirement age to 67. However, the change also meant that statistics would have shown a sudden surge in unemployment. To avoid this, it was agreed to remove all those 58 years and older from the statistics if they hadn't found a job within a year.

The good news is that the number of older workers in the work place has risen markedly in recent years. In 2010, there were 7.2 million workers over 50, which was 2 million more than 10 years earlier. These are usually workers who grow older in the same job. The percentage of older workers rose from 17.9 to 26.2.

Still, the older unemployed in Germany – as elsewhere – remain an often intractable problem. Employers fear that older people are less flexible and productive, while the older unemployed who had previously enjoyed high salaries are often reluctant to take the pay cuts that are almost inevitable.

"It often takes time for these people to agree to make concessions," says one expert, "but wait too long and you have another problem – employers are suspicious of people who have been unemployed for a long time, and are unlikely to hire them."

Read the full original article in German by M. Hollstein and S. v. Borstel

Photo - giopuo

*Newsbites are digest items, not direct translations

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