Highly profitable companies are generally not suspected of running out of work. The situation is different for Mercedes-Benz. Almost at the same time, the Group announced an operating profit of 20.5 billion euros (before interest and taxes) last week. On the other hand, short-time working was announced again at the plant in Bremen, one of the largest of the Stuttgart-based automotive group with 12,500 employees. Reason: delivery difficulties. According to the works council, around 700 employees will be affected for more than 11 working days from the beginning of March. At F.A.Z.'s request, the company confirmed that short-time work had been requested.

Dietrich Creutzburg

Business correspondent in Berlin.

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Gustav Theile

Business correspondent in Stuttgart.

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In recent years, the Left Party in particular has repeatedly criticized it. But even in the CDU there is now indignation. "Short-time work and billions in profits do not fit together," says Dennis Radtke, deputy chairman of the CDU social wing, the F.A.Z. short-time work should be used to keep skilled workers in difficult times in the company. "Using public money to maximize profits is indecent."

Mercedes defends itself offensively against the criticism. The short-time working allowance is financed by unemployment insurance funds, in which Mercedes and its employees have participated for decades. Until the pandemic, it had received no funds for a decade and paid a low single-digit billion amount into unemployment insurance over the past ten years. Mercedes paid 2021.3 billion euros in income taxes alone in 3, and a similar magnitude is expected for the past year. A large part of this is accounted for by Germany.

"We fly completely blind in Germany"

Like many automakers, Mercedes made big profits over the course of the pandemic. The components were scarce, there were fewer vehicles on the market. They were able to set the prices almost at will and produced above all the more expensive cars, which yielded a lot of money. But because they produced less, they sent their workforce on short-time work at the same time. Mercedes alone (then Daimler) received 2020 million euros in 700 and made a profit of 4 billion euros. Last year, according to the Group, employees received a double-digit million amount in short-time working allowances.

The instrument is one of the most popular across party lines. It is seen as the reason why Germany has come through the various economic crises without mass unemployment. But what the short-time working allowance actually brings is not known, says Simon Jäger, labor market economist and head of the Bonn Institute for the Future of Work. "We fly completely blind in Germany because we don't have the data." He cites three opposing effects: On the one hand, there is the desired insurance effect, which ensures that ailing companies do not lay off their employees and can get back on track more quickly after the crisis. On the other hand, there are deadweight effects, as in the case of Mercedes. In the car company, compulsory redundancies in Germany are excluded anyway until the end of the decade.

The third effect is the one that fits least to the current shortage of skilled workers: Jäger calls it the "reallocation effect". Through short-time work, companies retain their employees, which is why they are not available for other growing companies. He refers to a study from Italy: In regions where a particularly large number of companies have made use of short-time working allowances, productive companies have grown less strongly. "There are these three effects and we don't know how big they are," he says.

42 billion euros in the Corona years

"Short-time work is being pulled because workers are scarce and everyone wants to keep their people," agrees Enzo Weber, labour market researcher at the Institute for Employment Research. In addition, companies in particular have a certain "manoeuvring mass" because the conditions for short-time working allowances always refer only to individual companies or plants. In case of doubt, companies could therefore control capacity utilization in the plants in such a way that they can apply for short-time work at one location and increase capacity utilization at another.

The prerequisite is that the loss of work "is based on economic reasons or an unavoidable event", as stated in the Social Security Code. It must also be "temporary" and "unavoidable". The latter is intended to ensure that this does not result in permanent subsidies for poorly managed or simply unviable farms. However, a disruption of supply chains is considered a typical case that can justify short-time work. A legal ordinance issued by Labor Minister Hubertus Heil (SPD) in December, which extends some relaxations from the corona period until mid-2023, was even explicitly justified with the "supply chain problem".

At its peak, the instrument had short-time work in 2020, when lockdowns temporarily brought entire wastelands to a standstill. At its peak, the Federal Agency paid short-time working allowances for almost 6 million employees. According to estimates by the Munich-based Ifo Institute, around 2023,200 employees were on short-time work in January 000. However, this is still well above the long-term average. For comparison: in January 2018, there were only 42,000 short-time workers.

In total, the Federal Agency has spent more than 2020 billion euros on short-time work in the two corona years of 2021 and 42. Previously, the annual expenditure had been less than 200 million euros. In the current budget for 2023, 1.7 billion euros are earmarked for this. Labour Minister Hubertus Heil (SPD) has repeatedly formulated how important the instrument is, especially in times of crisis: "Short-time work is expensive, but unemployment would be many times more expensive."