Joblessness Levels Equal to 2015

Joblessness Levels Equal to 2015 - Demand for Changes

In August 2025, Germany saw an increase in unemployment, with 3.025 million people out of work, according to the Federal Employment Agency. This figure represents a rise of 46,000 compared to the previous month and 153,000 more than a year ago.

The unemployment rate also increased by 0.1 percentage points to 6.4 percent compared to July. This steady rise in unemployment has been observed since the end of 2022.

Federal Chancellor Friedrich Merz and Economics Minister Katherina Reiche, both members of the CDU party, have called for reforms to boost growth and employment. Merz emphasized the need for reforms of the labor market, economic policy, and approval procedures, while Reiche highlighted the importance of reducing energy prices, securing skilled workers, and reducing bureaucracy.

Merz also expressed concern about Germany's insufficient price competitiveness and the need to address this issue. Economist Veronika Grimm suggested strengthening labor market flexibility through less strict dismissal protection, like in Denmark and other European countries, as a possible solution.

However, the German Social Association and the German Trade Union Confederation called for specific support for unemployed people rather than cuts to the social security system. Rainer Dulger, president of the Confederation of German Employers' Associations, also emphasized the need for immediate reforms and an efficient, affordable social security system.

There are initial signs of stabilization in the labor market. Short-time work has decreased since the beginning of the year, and more companies reported job vacancies in August. However, the long-term outlook depends on economic development in the coming months.

Nahles, for instance, mentioned the possibility of the unemployment rate exceeding three million again in the winter. However, he also suggested that unemployment might decrease in September due to young people starting new jobs after completing their training.

Regional differences in unemployment were also evident in August. Bavaria had the lowest rate at 4.2 percent, while Bremen had the highest among German city-states at 11.8 percent, with Berlin's unemployment rate at 10.5 percent.

As the German government focuses on these reforms, it remains to be seen how they will impact the unemployment rate in the coming months. The anticipated autumn improvement in employment, as many young people start new jobs after completing their training, will provide a crucial test of these measures' effectiveness.