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Home Publications Blogs Beat the Press Overstating the Importance of Temporary Employment in Germany

Overstating the Importance of Temporary Employment in Germany

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Wednesday, 20 April 2011 04:46

The NYT told readers that:

"The rise of temporary labor has contributed to a plunge in German joblessness. The unemployment rate has fallen to just above 7 percent, or 3.2 million people, from nearly 12 percent in 2005, or almost 5 million people."

However the piece also reports that there are fewer than 1 million temporary workers today. Since the number of temporary workers was not zero in 2005, the impact of increased temporary employment on total employment would have to be somewhat limited. If temporary employment doubled between 2005 and the present (an increase of 500,000 jobs), then this would account for about 15 percent of the growth in total employment.

It is also worth noting that Germany's unemployment is actually just 6.3 percent using the OECD's methodology. This methodology is similar to the one used to measure unemployment in the United States. The official German rate counts many part-time workers as being unemployed. This unemployment rate should not be used in an article written for a U.S. audience.

 

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written by izzatzo, April 20, 2011 6:21
"The rise of temporary labor has contributed to a plunge in German joblessness."


Exactly. Any economist knows that temporary labor and permanent labor are complements and move together - not substitutes that replace each other which would keep the unemployment rate the same.

If they were substitutes then employers would exploit terms and conditions of temporary employment to strip benefits from permanent employment and that never happens, at least in the USA.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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