UNEMPLOYMENT IS A WORRY IN GERMANY

Wanganui Chronicle, 13 December 1949, Page 5

UNEMPLOYMENT IS A WORRY IN GERMANY

(By Jack Smyth, a Reuter Correspondent in Berlin).

The Occupying Authorities and the German Administration are today studying the problem of unemployment in Western Germany more closely than at any time since the end of the war. Although divergent views are expressed upon this problem, there is general agreement about its causes. These include: 1. The con-' stant additions to the Labour Force of returning-Prisoners-of-War; 2. The fact that thousands of young persons are now entering the Labour Market for the first time; 3. The influx of “refugees” to the British and American Occupied Zones; 4. The absence of Armed Forces and supporting services; and 5. The limitation of certain industries and widespread destruction. The more pessimistic German Officials unhesitatingly forecast that unemployment would, after Currency Reform, reach as high a figure as 7,000,000. Actually, the figure rose from 424,000 registered at Labour Oflices in June 1948, when the Currency changeover took place, to just short of 1,250,000 at the end of June 1949. During the same period, the total Labour Force and by “total Labour Force” is meant all those gainfully occupied includes not only wage and salary earners but self-em-ployed and family helpers together with the unemployed—increased from 17,900,000 to an estimated 18,700,000. Thus, while unemployement increased by more than 800,000, the Labour Forces showed a similar increase.

According to the German Authorities, the increase in the Labour Force was made up of 250,000 repatriated Prisoners of War, most of them from the Soviet Union, 180,000 refugees and expellers from the Soviet Zone, Berlin, Czechoslovakia and Poland, and a natural increase of 230,000 together with some 140,000 persons already resident in Western Germany but forced by economic circumstances to enter or re-enter the Labour Market.

Allied Manpower Officials, following a year-long study, have now divided the increase in unemployment into phases in which different trends are easily recognisable. To begin with, from the date of currency reform to mid-September, the increase (360,000) was sharp, as had been expected. There had been a considerable amount of hidden unemployment before currency reform. With money having little real value, many people, particularly, in agricultural areas, were content to work for such food as they could get others engaged in blackmarket activities, while numerous industrial firms were content to keep workers on their books who, when money became of value again, were a luxury which could no longer be afforded.

Unemployment began to decrease towards the end of September and the downward trend continued until the end of November. It then stopped abruptly and has never been resumed. The increase during the first quarter of this year, nearly 200,000 in January artd approximately 100,000 in each of the two succeeding months, gave rise to considerable misgiving. Attention was focussed particularly on the three so-called predominantly agricultural states where the majority of refugees have settled, Schleswig-Holstein, lower Saxony and Bavaria. Here, owing to over-population in relation to employment opportunities, unemployment increased to such an extent that at the end of the quarter, these states between them accountd for some 70 per cent, of all unemployed in the British and American Zones. In Lower Saxony alone, there were 90 unemployed for every registered vacant job. During the second quarter of this year, a noticeable change took place. Whereas in the first quarter, 72.5 per cent, of the increase had occurred in these three agricultural states, in the second quarter, the position was exactly reversed. Then, 72.5 per cent, of the increase of 105,000 took place in the five predominantly industrial states. In other words, unemployment was spreading to both the consumer goods and capital goods industries with all the signs of a general business recession.

Many reasons have been advanced for the increase in unemployment. At first it was lack of short term credit as well as seasonal influences and, after the first rather wild spending which followed currency reform, lack of purchasing power. More recently, lack of long term investment funds as well as a continuing lack of purchasing power has been regarded as the stumbling block to business revival. Whatever the cause, it seems that, today, employment opportunities are now available to the inflated population at least in those areas where there is the highest concentration of population. At the same time, accommodation is still scarce in those industrial areas which could offer the best opportunities of employment.'

There are some who consider that, under the conditions at present existing in Germany, more than a million unemployed can be regarded as natural or inevitable. Others argue that in a country where destruction and disorganisation are demanding every effort to repair and rehabilitate economic life, it is absurd to have so many people out of work.