German workers more upbeat than West Midlanders
As Birmingham’s Frankfurt Christmas Market spreads its festive cheer, Anna Blackaby looks at why Germany’s manufacturing workers are in a more upbeat mood than their West Midland counterparts.
The recession has prompted many curious incidents, none more so than a singular sight witnessed back in May by 7,000 marchers on the streets of Birmingham.
Two seemingly opposed forces came into rare alignment when former CBI director general Digby Jones marched alongside his old foe, Unite joint leader Tony Woodley, to call on the Government to act to preserve employment in the UK’s manufacturing sector.
One of the main measures the pair wanted to see introduced was a wage subsidy scheme for short-time working whereby the Government tops up the salaries of employees going part-time in a bid to avoid compulsory redundancies and retain qualified staff.
Their calls fell on deaf ears in the UK. Germany, on the other hand, introduced the measures when the recession took hold.
As a result, the German government is convinced unemployment in the country would be significantly higher than it is today and has just extended the scheme by another 18 months.
But experts over here are not persuaded short-time working will prove successful in the long-run and have raised concerns that the introduction of the scheme for recession-hit industries just “delays the inevitable” by keeping factories alive long after the needs of the economy have changed.
An initial glance at the unemployment trends of the two countries gives credence to Germany’s claims that it has kept unemployment under control.
Both the West Midlands and the German economies have a lot of similarities given their traditional strength in the manufacturing sector, particularly their automotive heritage.
Although inherited problems from the east of the country means the German unemployment rate nationally is hovering around the same mark as the UK, the rate at which joblessness grew during the year to September in the West Midlands compared to Germany presents a stark contrast.
Germany as a whole saw a relatively modest nine per cent increase in unemployment in the year to September, whereas the West Midlands experienced a 54 per cent surge during that time.
The German Federal Labour Agency said the increase would have been “much more drastic” in Germany had it not been for the introduction of short-time working and other labour market policy instruments.
The German ambassador to the UK Georg Boomgaarden believes the scheme has been a resounding success in not only keeping unemployment down but boosting domestic consumption levels.
“As far as jobs are concerned it was very important that we had the short-time labour scheme,” he said.
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