What needs to be done now to reduce long-term unemployment

BDA AGENDA 25/21 | Topic of the Week | 28 October 2021

The central task of labour market policy is to place people in vacancies quickly and, where necessary, to qualify them as skilled workers. Combating long-term unemployment remains a particular challenge.

In the last few years before the Corona pandemic, we managed to significantly reduce long-term unemployment and get people into jobs. That was a great success. Since the beginning of the Corona crisis, the number of long-term unemployed has risen again. Of 1.6 million unemployed people in the basic benefit system (SGB II), around 900,000 were long-term unemployed in September 2021, i.e. more than one in two people and 20% more than in the previous year. A large proportion of those receiving benefits under SGB II have not completed vocational training. What measures are necessary to bring more people out of long-term unemployment and into employment?

Firstly, support for people in the basic benefit system must be improved and intensified. This includes more funding for integration as well as targeted counselling and placement, which can be geared more closely to the individual situation of the persons. It is also important to introduce people who are particularly distant from the labour market to the labour market and to specifically address special challenges such as health restrictions. Secondly, the principle of support and challenge must remain at the core of the support system. This includes maintaining obligations to cooperate. A right to support and duties to cooperate are two sides of the same coin. Working one's way out of need, step by step, with support is a legitimate expectation of the solidarity community. Thirdly, qualification efforts must be strengthened, for example by making greater use of partial qualifications. Nor should it be more attractive to have more money in one's pocket through a "one-euro job" than by participating in a further training measure. Fourthly, the regulations governing additional earnings must be turned upside down. This means more incentives to expand employment instead of remaining in micro-employment.

Work is and remains the most effective protection against poverty and indispensable for social participation and personal development. The aim must therefore be to help people, to give them the confidence to do something and to improve their situation, instead of merely providing them with benefits and pushing them into a siding. The existing system is still too complicated in some places and not precisely targeted. The job centres should focus more on the people and less on bureaucracy. The introduction of de minimis limits would be an important step in this direction. Further development with the aim of making the rules clearer, simpler and more transparent is necessary.