Germany: Unemployment Is a Logical Result of Deindustrialization

The economic decline in Germany is taking its toll on the labor market: In July, 2.809 million people were unemployed, 82,000 more than in the previous month. In annual terms, there were 192,000 more unemployed in July than one year earlier, while the figure forJune was 172,000. more. The labor market “remains under pressure”, commented Leonie Gebers, State Secretary in the Labor Ministry.

The “pressure” is especially high in the automobile, chemical and construction sectors, the strongholds of productive employment in Germany. And while the signs of a depression are growing, the official narrative only uses the term “recession”.

Granted, unemployment regularly increases during the summer months, as companies often wait for the end of the vacation period, in September-October, to start hiring again. However, over 20,000 new job cuts have already been announced at several leading automotive suppliers, 14,000 of them (out of a total of 58,000 jobs) at the ZF Friedrichshafen company. All these companies, including giants like Bosch and Continental, report substantial losses in the e-car sector, with investments not paying off due to low sales.

A particular problem in their labor market is the lack of apprentices available: industry would need some 204,000 new apprentices, but only 121,000 young Germans have so far applied for a job, widening the gap in the future workforce. In addition to other problems, many of which are due to by excessive “green” regulations, more than one third of German companies are considering relocating substantial parts of their production to sites outside the country.

Particularly dramatic, is the development in the construction sector: compared to the beginning of 2022, there were 27% less apartments available to rent in the seven largest German cities, according to the Cologne Institute for Economic Research (IW Köln). Housing projects in urban areas are faced with much higher hurdles than in the countryside, where the number of apartments to rent “only” dropped by 18%.

This also has to do with the low supply of newly-built apartments: government plans envisaged 400,000 new apartments per year, but a maximum of 250,000 will be completed this year. More regulations, “green” in nature and otherwise, combined with increased prices of material have made new construction too expensive. Among other obstacles, companies cite objections to new housing projects, the priority given to “nature” by radical ecologists, and the need to protect “endangered species”.