Corona ensures high unemployment despite growth

style="float: right; margin-bottom: 10px; font-weight: 600;"Wed 9th Jun, 2021

The effects of the Corona crisis have hit Berlin's economy particularly hard in a state comparison. The differences between the service sectors in Berlin are much more pronounced than in other cities and regions. This is shown by an economic analysis by Berlin Savings Bank.According to the study, the pandemic-related increase in unemployment of 1.9 percent in Berlin was "exceptionally drastic." In the first half of 2020, the number of people employed in Berlin fell by around 39,000, with marginally employed workers accounting for half of the decline. The greatest job losses were in the tourism and hospitality sectors.

In the area of business management and organization, there have been redundancies from office and secretarial jobs on the one hand, and new jobs in strategy and business management on the other. Of the transport areas, there have been shifts to logistics and delivery - caused by the upswing in mail order.In contrast, the capital city will record an increase in employment of 1.2 percent in 2020. However, if the self-employed, civil servants and marginally employed are included here, the picture is put into perspective: employment then falls to -0.4 percent, but is still well below the national average of -1.1 percent.In addition, Berlin experienced a relatively small slump in economic output of -3.3 percent. Similar to Brandenburg, the decline in gross domestic product (GDP) in the capital was comparatively moderate.

The analysis distinguishes here between "crisis losers" and "crisis winners," which nowhere have slowed or strengthened the economy more than in Berlin.The authors of the Savings Bank analysis see trade, transport, hospitality as crisis losers, which were mostly hard hit by the restrictions. By February 2021, the employment slump in these sectors in Berlin, at -5.3 percent, was significantly higher than in all other German states. The next highest decline was in Bremen, at -3.4 percent.

Employment growth in the winning sectors

On the other hand, the crisis winners were able to employ significantly more people in Berlin (+5.1 percent) than in all other German states. These include the information and communications technology sector, financial and insurance service providers, public administration and healthcare, i.e. all those sectors that have come through the pandemic comparatively unscathed.The next highest growth was achieved by the crisis winners in Schleswig-Holstein with 3.2 percent. According to the study, however, not all those affected will benefit from the increase in employment: Of the 30,000 people laid off due to the pandemic, only about half had found a new job by the end of 2020.

The study therefore sees a risk of long-term unemployment in Berlin becoming entrenched once again. Thanks to the crisis winners and stable industry, the study predicts that Berlin's economy will grow by around 3.5 percent in 2021.The authors attribute this discrepancy to the greater economic divide between crisis winners and losers. As a result, only some of Berlin's residents are benefiting from the increase in employment. Florian Seyfert, an economist at Berlin Savings Bank, emphasizes Berlin's role as a strong location for startups, the digital economy and for research and science.But because of the high requirement profiles in these industries, not all job seekers can participate in the development by a long shot. Mostly well-paid, highly qualified and specialized personnel are sought. "Precisely because the hospitality and tourism industries will not return to pre-crisis levels for a long time, it is therefore important to have the right qualification measures in Berlin's labor market." The calculations are based on figures from the Federal Employment Agency and the Federal Statistical Office.

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