“The job market for unskilled workers is booming”

Based on the microcensus data, which should still be evaluated with caution due to the influx of Ukrainian refugees, Enzo Weber from the Institute for Labor Market and Vocational Research (IAB) expects a further increase of around 100,000 people. The rate of unskilled workers in the relevant age group would thus increase by 0.7 percentage points to 17.7 percent.

How is the increase explained? And how big is the risk that many of the unskilled will sooner or later end up on citizen income?

“The increased number of unskilled workers also has something to do with Corona,” explains Weber, who heads the research department for forecasts and macroeconomic analyzes at the IAB. Because during the pandemic, the number of trainees collapsed. Young people who have therefore not found an apprenticeship are now counted among the unskilled.

Do people without vocational training have no chance on the labor market?

Not at all at the moment, says Weber: “The labor market for unskilled workers is booming.” The number of employees in helper jobs subject to social security contributions in September 2022 was 3.4 percent above the previous year’s value. At the level of skilled workers, the number of employees fell by 0.6 percent in the same period, but this also has to do with the difficulties companies have in finding qualified personnel.

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According to the most recent IAB job survey broken down by qualification level, around 24 percent of all vacancies in the final quarter of 2021 were helper jobs. For the unskilled, there are currently many jobs in the catering trade, at airports, with delivery services or in supermarkets, says Weber. “And technical innovations also create new helper jobs, think about collecting rental scooters.”

Is the booming job market for unskilled workers also reflected in earnings?

Absolutely. According to data from the Federal Statistical Office, the agreed hourly wages for unskilled workers rose by more than ten percent from the second quarter of 2020 to the final quarter of 2022, while skilled workers only get around four percent. The strong increase also has to do with the fact that the parties to the collective bargaining agreement anticipated or imitated the sharp increase in the minimum wage for the lower collective bargaining pay groups.

>> Read here: Employees are threatened with real wage losses in 2024 – despite high wage agreements

Weber certainly sees a danger here: “In view of the wage development for unskilled workers, more young people could ask themselves whether training is worthwhile.” Employment agencies and companies must therefore advertise, advise, convince and offer good training conditions even more intensively.

So is the strong increase in the number of unskilled workers not a concern at all?

You cant say it like that. Because even if the job market for unskilled workers is currently booming, they still have a significantly higher risk of becoming unemployed than qualified employees. On average over the past year, the general unemployment rate was 5.3 percent and that of unskilled workers was 19.8 percent.

Even if the employment situation is good at the moment, the unemployment rate for people without vocational training is still above the pre-corona level, says Weber. He warns that it will be difficult for individuals to return to work if unemployment lasts too long.

Last week, the head of the Federal Employment Agency (BA), Andrea Nahles, warned of long-term unemployment becoming entrenched when presenting the labor market data. In April, 885,000 of the registered unemployed had been looking for a job for at least a year without success. According to Nahles, around two thirds of the long-term unemployed have not completed vocational training.

what can be done

IAB researcher Weber emphasizes: “Almost 20 percent of the unemployed in the segment of the unskilled are a great potential that we have to raise, because otherwise we would not be able to fill all the jobs.” The training guarantee planned by the traffic light coalition is a right thought. “But we should also think more about modular qualification,” says the scientist.

>> Read here: The economy loses 100 billion euros because it cannot fill two million jobs

Not everyone of the unemployed will create a complete education. However, someone could, for example, be able to install heat pumps without having to go through the entire training course to become a plumbing and air-conditioning technician.

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