Unemployment exceeds 3 million: Minister calls for reforms!

Unemployment exceeds 3 million: Minister calls for reforms!

The labor market situation in Germany deteriorated dramatically in August 2025. The number of registered unemployed exceeded the three million mark for the first time in over ten years and reached 3.025 million, according to the Federal Employment Agency. This is an increase of 153,000 people compared to the previous year, resulting in an unemployment rate of 6.4 percent. The increase is not just a momentary phenomenon, but reflects the worrying state of the German economy, which is characterized by an ongoing recession. This reports Deutschlandfunk.

Federal Labor Minister Bärbel Bas is therefore calling for extensive investments in the economy in order to generate the growth that is urgently needed at the moment. The federal government has already provided various impulses to combat the negative development. Employer President Dulger, on the other hand, emphasizes that the effects of almost three years of recession have left a clear mark. He advocates comprehensive reforms to sustainably stabilize the labor market.

Sectors particularly affected

The difficulties are particularly noticeable in industry, the construction sector, trade and the service sector. In industry, the ongoing consequences of the recession have led to massive job cuts. By mid-2023, around 114,000 jobs had been cut, corresponding to a decline of 4.3 percent since 2019. Competition from China, particularly in the area of ​​electric cars and machinery, represents an additional challenge. US tariff policy is also putting a significant strain on exports, as German exports to the US fell by almost 4 percent in the first half of the year. Forecasts indicate that the situation will not improve quickly, as more layoffs than new hires are expected in the central industrial sector. Loud Time These problems are further exacerbated by external economic factors.

In contrast, there is a significant increase in orders in the construction industry in the first half of 2023. Orders rose by 9.4 percent and, adjusted for inflation, an increase of 7.3 percent remains. Employment in the construction industry also increased by 0.9 percent, and more than 5 percent of new job advertisements were reported. The federal government's planned billions in spending on infrastructure projects play a crucial role here.

Impact on trade and services

Retail, on the other hand, is under pressure from low willingness to consume and competition from online providers. Industry associations warn that around 4,500 stores will close in 2023. Staff cuts in retail will continue, albeit less sharply than before. Retail employment fell by 1.5 percent in 2024, leaving over 100,000 unfilled positions.

In the services sector, however, there was an increase in the number of employed service providers by 178,000 in the second quarter of 2023. The numbers have grown particularly in the areas of public services, education and health, while jobs have been cut in information and communication and in business service providers. The tourism sector, for example, is currently showing sustained demand, while temporary employment agencies are struggling with declines.

The current situation on the labor market is serious and requires decisive action from politics and business in order to set the course for positive development.