Coronavirus

“Scars” by Corona: The crisis hits young workers so hard

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The corona virus has triggered two crises.

The first is the one caused by the virus itself: the pandemic, a danger to life and limb. It exists primarily for the elderly. Corona claimed more than 9,000 deaths in Germany, more than 8,500 of them were 60 years and older, according to statistics from the Robert Koch Institute.

The second crisis is that caused by the measures against the virus, by the lockdown, the closing of schools, kindergartens, shops, offices and companies: the economic crisis. And this affects the young generation in Germany in particular.

Last week, Detlef Scheele, the president of the Federal Employment Agency, spoke to Die Zeit about those who were most affected by the pandemic on the job market: “Many younger people, because many jobs have been lost in temporary work and temporary employment contracts. And they play a role in starting your career, which is why youth unemployment is growing rapidly. ”

In fact, the unemployment rate for 15- to 25-year-olds was 5.9 percent in June – almost two percentage points higher than in the same month last year. And it could get worse for the young generation.

On the one hand, when the Corona crisis, as feared by many economists, triggers a wave of insolvencies in autumn and thus far-reaching layoffs. Secondly, because labor market experts fear that young people in Germany will continue to suffer from the Corona crisis for years to come.

“The situation for the young generation is very risky”

Enzo Weber, Head of Forecasting and Macroeconomic Analysis at the Institute for Labor Market and Occupational Research (IAB), says: “The situation for the young generation is very risky”. “If certain groups or age groups slip into a crisis-ridden job market, it not only causes short-term problems, but long-term effects: significantly higher unemployment rates and significantly lower incomes,” Weber said to NewsABC.net.

Weber calls these long-term effects “scarring effects”. Economic crises have an impact on working life for years, especially among young people who are just starting their careers. And especially in the corona crisis, Weber says, the expected scar effect is particularly great.

“We are currently experiencing a crisis, the special feature of which is that there are not so many layoffs at all. For example, it is less than during the recession in 2009, ”says the economist. “But the recruitment rates went down, and that wasn’t the case in 2009. This does not affect people with jobs who can do short-time work. But the boys who are entering the job market are having a problem right now. ”

This is also feared by Marius Busemeyer, a political professor at the University of Konstanz and an expert in educational and social policy.

“Since the proportion of atypical employees – fixed-term contracts, temporary work, part-time – is higher among younger people than older people, the younger ones will certainly be hit harder in the short term when they start their careers,” Busemeyer told NewsABC.net. In vocational training in particular, there is a risk that at the start of the training year in autumn, companies will not hire any trainees due to the crisis and may even permanently withdraw from training.

However, Busemeyer is less concerned about the “scar effects” that IAB economist Weber speaks of. “Young people have even more leeway in their career to compensate for breaks and delays in their employment; it becomes more difficult for older people (50 plus) who are now losing their jobs. ”

In addition, a distinction must be made between those who enter the job market with academic training and those who start out with simpler qualifications. “Even in and after the Corona crisis, highly qualified people will have better chances on the job market,” says Busemeyer.

“We drive on sight, however unsatisfactory it is for everyone involved”

Nevertheless, he hopes that politicians will work more for young workers and particularly trainees in the crisis. In June the German government decided to introduce training bonuses to encourage companies to hire new trainees even in the Corona crisis.

Busemeyer thinks this makes sense, but the measure must finally be implemented. “There are also certain doubts as to whether the premium is sufficient to keep companies in training,” he says. “And if the situation for university graduates also worsened significantly, you could think about a similar model in this sector.”

“We need better attitude dynamics as quickly as possible,” says IAB expert Weber. He calls for a “rescue fund for new hires”: “The simplest option would be to not charge social security contributions for a certain period of time for new jobs. If these costs were eliminated, hiring would be more attractive. The bureaucracy for companies would be low and the federal government could pay the insurance premiums. “

However, the reaction from the grand coalition to these proposals has been subdued. “The situation for apprentices and graduates is depressing,” says Kai Whittaker, a CDU member of the Bundestag and social politician, to NewsABC.net. “In the Corona crisis, companies lack planning security, so they are very reserved when it comes to new hires and apprenticeships.”

However, it was still too early to decide whether further help such as incentives to recruit was really needed. “We cannot yet assess the development of the crisis: are we on the way out or will it be a long march?” Says Whittaker. “We drive on sight, however unsatisfactory it is for everyone involved. But there is nothing else. In the end, if people don’t buy, don’t invest, companies don’t invest, then political incentives won’t help. ”

6 figures that show the extent of the corona crisis for the German economy

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