Number of furloughed workers in Germany has risen sharply, ifo says

Munich (dpa) – The number of furloughed workers in Germany has risen sharply, according to the ifo Institute in Munich.

The economic research institute reported on Friday that around 900,000 people were signed up in January to the government’s scheme, known as short-time work, which pays the bulk of out-of-work employees’ wages for companies struggling during the Covid crisis.

That was up from 780,000 in December and corresponded with 2.7% of the workforce. In the last month of 2021, 2.3% of workers were furloughed, the ifo said

It noted that the rise was “particularly acute” in hospitality, where almost one-quarter of employees – or 240,000 people – are thought to be currently on short-time work. The number in December stood at just 90,000.

In retail, the number rose by 45,000 to 120,000 employees, or 4.9% of workers.

The number of short-time workers in Germany’s manufacturing industry fell from 285,000 in December to 218,000 the following month, corresponding with 3.1% of the workforce. Ifo expert Stefan Sauer attributed this to “the improved availability of intermediate products.”

The economic research institute estimates the number of furloughed workers based on its own surveys and figures from the Federal Employment Agency.

According to current data from the Federal Employment Agency, companies had registered 286,000 people for short-time work from January 1 to 26. However, it noted that the number of cases in which short-time work benefits are actually disbursed tends to be lower.

The federal agency has repeatedly stalled on releasing that data.

Short-time work in Germany skyrocketed at the beginning of the pandemic, with more than 6 million people signed up for the scheme in April 2020.

In January and February 2021, the number hovered above 3 million. After that, it initially fell, but it has been on the rise again since November.