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Buying Itself Out of a Recession: How Germany Avoided Mass Unemployment
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Buying Itself Out of a Recession
Countries Ask How Germany Avoided Mass Unemployment
By SPIEGEL Staff
Germany, second only to China as the world's leading exporter of goods, has been particularly hard-hit by the collapse of global markets. But the mass unemployment some had feared has failed to materialize. Labor experts in many countries are wondering how Germany has done it.
Business wasn't going well for Schneider, a mid-sized company in the western German state of Rhineland-Palatinate, at the beginning of the year. But the company, which manufactures camera lenses and filters, did not lay off any of its workers. Instead, it put 230 employees onto a short-time working program, including Dirk Christian, a technical supervisor in a final assembly plant.
Christian, 33, took advantage of his free time to renovate his apartment -- and to get married. "Short-term work prevents layoffs," says Christian, "which, of course, makes it easier to make important life decisions, like getting married."
Germany currently has 1.1 million workers participating in short-time working programs, known in German as Kurzarbeit . They include people like Christian, who don't have enough work, but who also are nevertheless not being let go. They stay at home for days or even weeks at a time, and yet they receive 80 to 90 percent of their wages, thanks to subsidies paid by the Federal Employment Agency.
Promising Figures
It was due in part to the workers in the program that Germany's new labor minister, Franz Josef Jung, was able to report an astonishing development last Thursday. In the midst of the country's deepest economic crisis, which has led to dramatic declines in order volume in key industries, unemployment was only half a percentage point higher in 2009 than it was in 2008. "The current figures are encouraging," Jung said. There ...
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