Record unemployment heats W. German summer of fiscal discontent

The number of jobless West Germans has jumped to its highest figure in nearly 30 years, a new sign that the "economic miracle" is facing tough times. Statistics just released by the federal department of labor show that 1.25 million West germans -- 5.3 percent of the work force -- are unemployed. It is a steep increase from the June figure of 4.8 percent.

The news came during a summer of much fiscal discontent in Bonn, where government officials are wrangling over a draft of the 1982 austerity budget and studying ways to rescue the deutsche mark, which has slipped a third of its former value over the last year.

Adding to the gloomy economic picture are new figures on industrial production for June, showing a decline by a seasonally adjusted 3.6 percent. The fall in output had already risen by 1 percent in May.

The economic slowdown has encouraged employers to adopt a conservative hiring policy, and the first to feel the impact is West German youth. Because of the postwar baby boom, some 100,000 more individuals will crowd the job market this year than will retire. Financial experts say that on through the end of the 1980s, a surplus of 1.4 million young adults will be out of work.

The prospect of spiraling unemployment leaves West Germany increasingly vulnerable to youth unrest, and political leaders from Chancellor Helmut Schmidt on down have described it as the srpingboard of disaffection among young adults.

The population at large, once boastful about its national prosperity, finds unsettling precedents in the sluggish economy of the '80s, recalling the traumatic 1920s and '30s, when high unemployment and idled production created the climate for the rise of Hitler.

With a new crop of graduates shopping for jobs, some marked increase in unemployment was expected, but the sudden climb by 120,000 -- the worse figures since 1952 -- has prompted the labor department to predict more woes for the unemployed.

As yet, many industries have held off making new investments, complaining that they are hemmed in by the high interest rates, which reflect the tight monetary policy of the Bundesbank, the central bank.

That policy was adopted in part because of high interest rates in the United States. Although the move has strengthened the dollar, it has tended to depress European currencies. The Europeans, in turn, have boosted their own interest rates to try to control the economic drain.

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