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German unemployment rate remains stable as economy takes record plunge

The unemployment rate in Germany held steady at 6.4 percent in July, unchanged from June, in a new sign that the worst of the economic storm unleashed by the coronavirus may be over.

German unemployment rate remains stable as economy takes record plunge
A sign in Dresden in June says "We're hiring!". Photo: DPA

The jobless rate had begun flatlining in June, which was just 0.1 percentage point up on May, seasonally-adjusted figures from the BA federal labour agency showed.

Before the pandemic struck Europe's top economy, the ranks of the unemployed had hovered at around 5.0 percent, record lows since reunification.

READ ALSO: German unemployment stable despite recession warning

“The job market remains under pressure because of the coronavirus pandemic, even if the German economy is now on a recovery path,” noted Daniel Terzenbach, who heads the BA's regions department.

The impact of the crisis on the job market has been cushioned by Germany's shorter hours scheme, in which the government tops up workers' wages when  their shifts are slashed.

After an initial surge to 10.6 million in March and April combined, the numbers of new applications for the scheme have come down significantly.

Between July 1st and 26th, applications were received for 190,000 workers.

Latest data showed that payments for shorter hours were paid to 6.7 million workers in May, up from 6.1 million in April and 2.46 million in March.

Underlining the scale of the crisis sparked by the closure of borders, shops and schools to halt transmission of the virus, the BA said the demand  for the scheme was “far above the time of the major recession in 2008 and 2009.”

Nearly 650,000 businesses also applied for Kurzarbeit (shorter-worker hours), levels not seen since the 2009 financial crisis

Shrinking German economy

The German economy shrank by a record 10.1 percent in the second quarter of 2020 because of the coronavirus impact, official data showed Thursday, the biggest decline in the country's post-war history.

Federal statistics agency Destatis said “the historic decrease” quarter-on-quarter was worse than any seen during the financial crisis of 2008-2009.

The pandemic had led to “a massive slump” in both exports and imports, it said, but noted that government spending had increased from April to June.

But it's not all bad news: Germany has withstood the coronavirus shock better than many of its neighbours.

Stable infection rates encouraged the country to relax coronavirus restrictions in early May, allowing factories, shops and restaurants to reopen.

Thursday's data “is a glimpse in the rearview mirror”, ING bank analyst Carsten Brzeski told AFP.

“The economy already began picking up in the course of the second quarter.”

Altmaier said he expects the German economy to return to growth in October, boosted by unprecedented government stimulus to spur investment and consumer spending, alongside huge rescue packages that have helped companies like Lufthansa stay afloat and preserve thousands of jobs.

READ ALSO: EU approves huge bailout of German giant Lufthansa

Germany's bounce-back should also get a lift from the European Union's 750-billion-euro coronavirus recovery plan.

Altmaier's ministry forecasts that German output will contract by 6.3 percent in 2020 before expanding by 5.2 percent in 2021.

By contrast, the European Commission expects the economies of France, Italy
and Spain to shrink more than 10 percent this year.

Second wave fears

Better-than-expected business and consumer confidence surveys recently suggested Germans are feeling more optimistic about the future.

But concerns have grown over a spike in COVID-19 cases at home and across Europe, partly fuelled by summer travel.

As an export powerhouse, Germany is highly vulnerable to virus setbacks in other countries that could lead to renewed shutdowns that once again disrupt supply chains and suppress demand.

In April and May, at the height of the global lockdowns, German exports plummeted around 30 percent year-on-year.

Germany's mighty industrial sector, already feeling the pain from US-China trade tensions and Brexit uncertainty, has been especially hard hit.

Car manufacturing alone fell 40 percent year-on-year over the first six months of 2020, a 45-year low.

ING analyst Brzeski said German exports would take time to return to pre-pandemic levels, leaving the country to rely on domestic demand to power its rebound.

KfW chief economist Fritzi Köhler-Geib said the German economy had a “successful start” to the summer but it was “too early to give the all-clear”.

“The pre-crisis level will remain a long way off for the foreseeable future, and the continuing fierce rage of the pandemic in large parts of the world is an enormous risk for Germany as an export nation.”

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WORKING IN GERMANY

How easy is it to get an English-speaking job in Germany?

Lots of foreigners in Germany hope to get a job or climb the career ladder. But are there still opportunities for English speakers who don't have fluent German? We spoke to a careers expert to find out.

How easy is it to get an English-speaking job in Germany?

The pandemic turned our lives upside down. As well as having to isolate and be apart from family members, many people found themselves in need of a new job or decided they want a change in career. 

If you’re in Germany or thinking of moving here, job searching is of course easier with German language skills. But many people haven’t had the chance to learn German – or their German isn’t fluent enough to work in a German-only environment.

So how easy is it to find a job in Germany as an English speaker?

We asked Düsseldorf-based career coach Chris Pyak, managing director of Immigrant Spirit GmbH, who said he’s seen an increase in job offers. 

“The surprising thing about this pandemic is that demand for skilled labour actually got even stronger,” Pyak told The Local.

“Instead of companies being careful, they’ve hired even more than they did before. And the one thing that happened during the pandemic that didn’t happen in the last 10 years I’ve observed the job market was that the number of English offers quadrupled.”

READ ALSO: How to boost your career chances in Germany

Pyak said usually about one percent of German companies hire new starts in English. “Now it’s about four percent,” said Pyak. 

“This happened in the second half of 2021. This is a really positive development that companies are more willing than they used to be. That said it’s still only four percent.”

Pyak said he’s seen a spike in demand for data scientists and analysts as well as project managers. 

So there are some jobs available, but can foreigners do anything else?

Pyak advises non-Germans to sell themselves in a different way than they may be used to. 

A woman works on her CV in Germany.

A woman works on her CV in Germany. Photo: picture alliance/dpa/dpa-tmn | Christin Klose

“In your home country you have a network, you have a company you used to work for that people know,” said Pyak. “This might be partly the case in Germany if you worked for an international company. But for most employers you are a blank sheet of paper, they know nothing about you. So unfortunately if they don’t know you or your country, they will assume you are worse (at the job) than Germans. It’s completely unjustified but it’s just how people are. 

“Get the employer to see you as the individual person you are, the professional you are. This requires that you have a conversation with somebody inside the company, ideally the decision maker, meaning the hiring manager or someone in this team.”

Pyak said it’s important to go into details. 

“Don’t think of me as a foreigner, think of me as ‘Mark who has been working in IT for 15 years’,” said Pyak. “Don’t read the job advert (to the manager), ask them what his or her biggest worry is and why is that important? And then dig deeper and offer solutions based on your work experience. Share actual examples where you proved that you can solve this problem.”

READ ALSO: 7 factors that can affect how much you’re getting paid

Pyak says foreigners in Germany can convince managers that they are right for the job – even if their German isn’t great. 

“What I advise clients at the beginning of the interview is to ask very politely if you can ask them (managers) a question. And this question should be: how will you know that I’m successful in this job, what is the most important problem I need to solve for you in order to make myself valuable? And then ask why this problem is so important. And the answer to that achieves a million things for you – first of all you’ve established a measurement by which you should be measured. 

“Then when you get into detailed discussion you can always tie your answer back to the question you can solve, which usually makes up 70 or 80 percent of the job. If you can solve this problem then what does it matter if you do the job in German or English?”

So in answer to our original question – it seems that getting an English-speaking job in Germany can’t be described as easy but it is very possible especially if you have the skills in your chosen field. Plus there are ways to increase your chances. Good luck! 

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