Germany's Jobless Rate Jumps Again

The unemployment numbers that Florian Gerster presented to the German public on Thursday looked bleak. But the head of German Labor Office said he had not lost all hope.

Under certain circumstances, the Social Democrat said, the prospects for improvement could rise in the second half of the year. "That is based on a mixture of hope and probability," he said.

Gerster (photo) gave his analysis at the monthly news conference he holds in Nuremberg to announce the country's latest unemployment figures. The numbers he presented on Thursday were not pleasant news for the country's political leadership: The February unemployment rate hit its third highest monthly level in the country's history.

Rate rises to 11.3 percent

The rate rose from 11.1 percent in January to 11.3 percent in February. In human terms, 4.706 million people were out of work during the month. That figure is roughly 300,000 more than the total population of the country's sixth-biggest state, Saxony. With the increase, the jobless totals are continuing to head back toward the country's worst levels, which were set in January and February 1998, when more than 4.8 million were out of work.

But the rise was much smaller than January's increase, when 398,000 people lost their jobs and the unemployment rate rose 1 percentage point to 11.1 percent.

The total number of people who became unemployed in February was calculated in two different ways -- one that includes seasonal factors like weather and one that does not. Because of winter weather, the February rate usually climbs. This was the case last month as well, when a total of 83,100 more people became unemployed. With things like weather removed from the calculation, the total was 67,000, nearly twice the number expected by economists interviewed by the Reuters news agency.

Cold winter blamed for increase

Gerster blamed the weather for the overall increase. "February was cold and snowy. That drove up the total number of unemployed workers who work outside," Gerster said. The average temperature for the month was 0.4 degree (32 degrees Fahrenheit). That was 2 to 3 degrees lower than average.

The high unemployment rate is the most pressing domestic political problem facing Chancellor Gerhard Schröder (photo), who once promised voters that he would drive down the total to 3.5 million. Since taking office in October 1998, he has sought to seek a consensus program on job creation with the country's business and worker representatives in a forum called Alliance for Jobs. But the effort broke down for good on Monday, and the chancellor is now working on his own program that he will detail in an address to the country's parliament next Thursday.

"We don't have any time to waste," Schröder said on Monday.

Schröder's economics and labor minister spread a similar message after hearing the latest jobless figures. "Given the overall serious situation on the job market, everyone must recognize that the time for discussing economic and employment issues is over," Wolfgang Clement said. "Now is the time for action."

Economy barely grew last year

The climbing jobless rate has spread a stain like spilled ink on the country's stagnate economy. Last year, that economy grew by 0.2 percent, the lowest rate since Germany suffered through a recession in 1993. At the same time, the jobless problem has darkened consumer confidence, sending it down to 1993 levels as well. "As long as the German economy remains stagnate, the job market cannot improve," Gerster said.

But even if the economy were to grow by 1 percent this year, as Clement is predicting, the number of unemployed people in the country would still total about 4.23 million, according to the Institute for Employment Research. That would be 170,000 more than the average total in 2002, said the institute, which is associated with Gerster's agency.

Leading economists like Hans-Werner Sinn also say growth will not produce a flourishing job market. "In 1970, we had only 150,000 jobless workers," Sinn said in a recent interview with the newsmagazine Der Spiegel. "This year, we are expecting 4.3 million. The trend has not been stopped. We are on the wrong track."

These economists say the government needs to get at issues that they consider to be the real source of the problem. These issues include the high non-labor costs created by climbing premiums for health insurance and payments into the country's pension system and the country's regulations on layoffs.

Unions resist regulations change

Such issues have been discussed in Schröder's Alliance for Jobs. But the chancellor has encountered stiff resistance from the country's union leadership, particularly on the issue of layoffs. "We will not allow these protections to be trampled on," Michael Sommer, the leader of the German Trade Union Federation, said recently. "There is not one credible study that shows such changes would create jobs."

Germany is not the only European country that is watching its unemployment rate grow. The rate is climbing throughout the European Union, according to a report released this week by Eurostat, the Union's statistical agency. In January, more than 3.9 million people lost their jobs in the 15-member alliance.

The overall rate rose from 7.8 percent to 7.9 percent. The rate is calculated in a different way from Germany's method, and Germany is planning to introduce the EU system in order to achieve uniformity. The Union's statisticians count only those unemployed people who are available to take jobs. Under Germany's rules, a person is considered to be unemployed if he or she works less than 15 hours a week and is registered with the country's labor office.

Based on the EU calculation, Germany had an unemployment rate of 8.6 percent in January. The EU country with the highest total was Spain with 12.1 percent and the country with the lowest was Luxembourg with 2.7 percent.