German Jobless Rate Rises to 11 Percent

FRANKFURT, Germany Feb. 5 — Germany's jobless rate climbed to 11 percent in January, leaving a record 4.62 million people jobless, the country's federal labor office said Wednesday.

The new rate is up from 10.1 percent in December and is the highest since Chancellor Gerhard Schroeder started his first term in 1998.

The number of unemployed surpassed the previous high of 4.46 million in February 1999 and was up from 4.25 million jobless in December. The total is 333,000 more than a year ago.

Labor Office President Florian Gerster said the first signs of economic stabilization had yet to reach the labor market.

Economics Minister Wolfgang Clement has already warned that he doesn't expect to see the number drop below 4 million this year given the flagging economy and adverse affects due to threatening war with Iraq.

Angela Merkel, head of the opposition Christian Democrats said the numbers "surpass our worst expectations" and called on Schroeder's government to come up with a "national show of strength" to solve the problem.

The new jobless figures underlined anew the persistent difference between the more prosperous western part of the country, which had an unemployment rate of 8.8 percent, and the formerly communist east, with a 19.5 percent jobless rate.

Leading economists said the new figures show the need for far-reaching reforms to Germany's labor system, which makes German workers some of the most expensive in the world.

Also Wednesday, Germany's economic ministry announced plans to change the way it calculates its jobless rate next year to meet European Union standards.

Under the new system only those actively searching for work will be counted, according to a report Wednesday in the German daily Die Welt. Currently everyone who works fewer than 14 hours per week and is registered at the national labor offices is considered jobless.

German and French labor laws are crazy. So are most Western European countries' labor law for that matter. Labor Unions like IG Metall have a huge say in how a company is run. They automatically get seats on the management board, which makes day to day decisions about how the company is run.

The firs tthing these countries have to do is to let the owners run their businesses as they see fit, not as the labor sees fit. This would probably mean abandoning the two tiered boards of directors (Supervisory board and management board). As a second step, these countries could make it easier to start a new business. In Germany, even if you want to form a simple type of corporation, the GmbH, you've got to put up some serious capital. Of course, a lot of the productive French and German young folks recently left for greener pastures, like the US and UK. I think about two years ago, there were 100,000 French citizens registered at the consulate in San Fran. Many of them were working 50-60 hours per week in tech, when they could have been at home working 35 hours a week in some silly job. Of course, they probably wouldn't have had a job because no one there wants to hire anyone because it's impossible to fire anyone.

The thing is, that there probably isn't a whole lot of incentives for Germans to seek work seeing as they live in such a cushy welfare state. Who would have thought that there would be a system of governing that makes the Germans, of all people, lazy and inefficient?

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