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Working in Germany: How is the pandemic affecting jobs?

Working in Germany: How is the pandemic affecting jobs?
A bar closed in Munich in April during the coronavirus shutdown. Photo: DPA
The coronavirus crisis has hit some industries hard, while boosting others. We looked at what it could mean for jobs and salaries.

This year has seen lots of big changes in the way we work, from doing 'home office' more often to having hours cut by employers.

In the second part of our series on working in Germany, we delved into a study by Welt on jobs.

It shines a light on which industries are thriving, and those not faring so well at the moment. Here's what we know about current average salaries in some sectors and how the pandemic is shaking things up.

IT sector winning

There's no doubt about it: Information and communications technology, or IT, is booming around the world. So it's no surprise that the industry is gaining more importance in Germany, too.

Before the pandemic, the IT services sector already had around 781,000 employees and is on the way to catching up with the automotive industry, where, according to the Federal Statistical Office, 954,000 people are employed.

While the number of employees at car manufacturers and suppliers grew by just 11 percent in the six years before the pandemic hit, the number of IT jobs increased by an impressive 41 percent.

The fact is that no industry can do without IT experts. The virus crisis will accelerate rather than slow down this trend, experts say. That's because distance rules and quarantine measures have led to a shift in the way we use and rely on the Internet.

READ ALSO: Which jobs in Germany have the best salaries and pay rises?

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Working from home, which has become part of everyday life for many people, means there's a dependency on hardware and software in many people's everyday working lives.

So what does that mean for wages? Well, the political and social reaction to the virus indirectly improves the salary prospects of IT workers, while it brings with it great uncertainty and restrictions for other industries.

“Many employees in Germany are already noticing the consequences of the corona pandemic on their wallets,” said André Schaefer, salary expert at the online job platform StepStone.

Lots of people are taking a financial hit due to the crisis. Photo: DPA

The effect of 2020 on people's lives is massive.

More than seven million employees in this country were temporarily on Kurzarbeit (reduced working hours) at the peak of the crisis, and many people are still working less. 

Clubs are still not open and some businesses, such as bars and venues, have had to restrict the amount of people they allow in due to distancing measures. This all impacts their ability to bring in cash.

“We will probably not really see the extent to which the crisis will affect salaries until next year,” said Schaefer.

“There will be sectors such as the IT industry where salary prospects will stabilise relatively quickly.”

Employees in demand such as IT experts or engineers will have very good salary prospects beyond the recession of 2020, he added.

READ ALSO: Is Germany doing enough to ensure small businesses survive the coronavirus crisis?

Hospitality industry severely hit

Sadly, this cannot be said for other sectors of the economy.

A significant proportion of the more than one million employees in the hospitality industry are still fearing for their jobs. So it is of little consolation that in the 10 years prior to Covid-19, the hospitality and hotel industry recorded above-average salary growth.

In absolute figures, employees in both sectors of the economy are at the bottom end of the scale: in the catering trade, the average wage for a full-time employee was most recently €2,290 per month. And in the hotel and other accommodation industry it was €2,475.

These figures include those of managers as well as kitchen assistants and cleaning staff.

“In addition to the aviation industry, the hotel, tourism and leisure industry has suffered in recent weeks,” Schaefer said.

Parts of the retail trade outside the food retail sector are also going through a difficult time. Statistically, the retail trade is one of the sectors with below-average pay.

READ ALSO: 'I'm afraid of ending up on the street': American owner of Berlin bar fears for future after corona eviction

However, a particularly large number of people also find employment here, and people of all qualification levels. In total, almost 2.5 million people earn their living in retail. The average salary in this sector is €3,131 per month.

A cafe in Dresden in May. Photo: DPA

Health workers see high salary increases, but education lags behind

Even more people work in the health care sector in Germany. And contrary to a widespread perception, wage and salary trends in the medical sector are not terrible.

With an increase in salary of 30.2 percent, employees in the healthcare sector performed well above average (of 27 percent) between 2009 and 2019.

Their incomes rose more than twice as fast as inflation during this period. This of course does not apply to every medical worker who is, for example, living in an expensive city with high rents like Munich.

Health care pay contrasts with the below-average salary development in the education sector, where employees achieved an increase of 17.7 percent, only slightly above the general inflation rate.

“The fact that wages in the area of education and training have risen relatively little is almost a little frightening,” said Carsten Brzeski of ING Deutschland.

Car industry outlook not good

And there is something else that makes Germany pensive: one of the driving forces behind the development of incomes in this country before the coronavirus crisis was a sector that may now be on the verge of a structural transformation: automotive engineering.

Starting from a high level, gross incomes of car manufacturers and suppliers increased by a further 36 percent between 2009 and 2019.

Some industry experts doubt that such growth rates can be sustained over the next 10 years. That's because the challenges of e-mobility and driverless cars are changing the industry.

Add to that weak global growth and threats by US President Donald Trump to impose car tariffs, plus coronavirus and there's stress ahead.

READ ALSO: Where are the most jobs in Germany's car industry

What happens next?

The government has said it will help businesses and sectors affected by the pandemic by pledging funding and support.

But is it enough? One thing is for sure: hard times are ahead.

READ ALSO: Explained: The best and worst paid jobs in Germany

Jobs in Germany

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