The Federal Institute for Employment has thus played a major role in improving workers’ prospects and accelerating the modernization process. Some groups are especially hard hit by unemployment, especially those with inadequate vocational qualifications, older people, those who have been out of work for long periods of time and, in the new federal states, women. Government and industry are making great efforts to help them. Because of the increasing use of modern technology in the workplace, greater importance attaches to vocational skills. It is also, however, important that those affected by unemployment receive adequate social security.

On 23 January 1 996 - in view of the sharp rise in unemployment to nearly 4.2 million at that time - the Federal Government and representatives of the business community and the unions agreed on an “Alliance for Jobs and a Competitive Germany”. The text of the agreement stated: “Industry, unions and government, desiring to boost employment figures, have made it their joint aim to reduce the number of registered unemployed by half by the end of this decade. This goal can be achieved if no further disturbances occur on the labor market and all concerned focus their actions on its achievement.” Thus far, however, the parties involved have been unable to agree on a resolute implementation of this declaration of intent. In December 1996, 4,148,000 people in the whole of Germany were out of work: 2,961,000 (an unemployment rate of 9.6 percent) in the western part of the country and 1,187,000 (an unemployment rate of 15.9 percent) in the east. Federal subsidies for the Federal Institute for Employment totaled about DM 14 billion in 1996.