The German labor market is capricious: the seasonally adjusted number of unemployed is rising due to the faltering economy. In March, 232,000 more people were registered as unemployed nationwide than a year ago. At the same time, there are 45.6 million people in employment, more than ever before. The increase in employment subject to social security contributions was almost exclusively due to immigrants, mainly from outside the EU, as the head of the Federal Employment Agency, Andrea Nahles, said on Friday.

Despite the economic slump, inflation and political uncertainties: industry, trade and service providers continue to suck up skilled workers like a dry sponge. In some cases, the vacancies are no longer reported to the employment agencies, but are filled directly. In order to cover the demand, which has been falling at most slightly for months, immigration is necessary, said Nahles. "Even if we leverage all domestic potential, this will not be possible without further immigration, also for demographic reasons. We need immigration of both workers and skilled workers." However, Labor Minister Hubertus Heil also pointed out that the domestic opportunities - such as more and longer employment by women and older people - must be used.

Working relationships are designed more individually

The Skilled Immigration Act passed by the Federal Cabinet provides for many simplifications, a simplification of procedures and the reduction of thresholds for people who want to come to Germany from abroad, said Nahles. But it also prepares the federal agency for more work. Part of the work of embassies and consulates is transferred to the agency. The authority will therefore have to hire staff in order to master the larger number of applications and consultations. "We want to do this job well," said Nahles. "We think that's an important issue for society as a whole."

Another effect of the shortage of skilled workers is the trend towards individually negotiated conditions in employment relationships. "We are observing that the employers' market, which we have had for decades, is changing into an employee labor market," said Nahles. The trend is just beginning: companies that are urgently looking for staff have to think carefully about what they can offer in terms of working conditions or wages. "I think that's the way we'll see a lot in Germany in the next few years." Working relationships would be made much more individual.

Only weak animation

A total of 2.594 million people were unemployed in March due to a hesitant spring revival - 26,000 fewer than in February. A year ago, the number had dropped by 66,000. Compared with March 2022, the number of unemployed increased by 232,000. The unemployment rate remained stable, but at 5.7 percent it is 0.6 points above the same month last year. The federal agency used data that was available up to March 13th.

Short-time work has not increased further. Between March 1st and March 27th, companies registered short-time work for 50,000 employees. It is not yet known how much of this will be used. The most recent data on actual take-up is from January: In that month, 140,000 people received short-time work benefits.