Unemployment reaches record high: IW study shows alarming figures

Unemployment reaches record high: IW study shows alarming figures

The current IW study shows that the unemployment rate is expected to reach its highest level since 2015 due to the economic crisis. Last year the labor market remained fairly stable despite the recession, but there are noticeable effects for the current year. Gross domestic product was 0.3 percent lower in 2023 than in the previous year, in contrast to 2022, when growth of 1.9 percent was recorded.

According to the study, companies' employment plans do not indicate any growth for the rest of the year. New job vacancies reached their lowest level in five years in March. A paradoxical trend is evident in the labor market, as there is a major shortage of skilled workers despite the rising unemployment rate. This shortage has more than doubled in the last decade.

Companies tend to retain their existing skilled workers instead of hiring new ones. The economic situation may require an adjustment in staffing levels to ensure competitiveness. Unemployment is expected to exceed the level of the crisis year 2020. Companies are struggling with increased costs due to various factors such as the energy crisis, inflation and the expiration of government aid.

In order to close the skills gap, the aim is to better integrate immigrants into the labor market. Immigration plays an important role because the number of job vacancies is not sufficient to reduce the number of unemployed. The traffic light government is called upon to take legislative initiatives to harness the potential of the existing workforce and improve integration. Measures such as language learning, better networking with employers and simplifying bureaucratic procedures are required.