HispanicBusiness

Some 11,000 employees laid off earlier this month from Schlecker, a troubled German retailer, faced an uncertain future Thursday after a week of efforts by state authorities to help them collapsed.

The employees in question, predominantly female, worked their last day Saturday at the nationwide chain, after insolvency administrators closed 2,200 of 5,400 branches in a bid to restore profitability.

The state government of Baden-Wuerttemberg, where Schlecker's head office is located, had wanted to persuade the other 15 German states to lend funds for a special employment agency for ex-Schlecker staff.

But three other states balked at the terms for the special job-placement scheme.

The plight of the women has prompted debate about whether to help workers who have missed out as the German economy has grown. National unemployment sank to a two-decade low of 2.84 million in adjusted terms, figures issued Thursday showed.

The Schlecker shops resemble chemist shop or drugstore chains, though they do not serve fresh drinks or sell prescription medicines.

Retail experts say Schlecker had itself to blame as it failed to modernize and keep up with the other drugstore chains and have questioned whether even the remaining business can survive.

The layoffs, still not finalized in writing, prompted leftist criticism of the quality of Germany's help for unemployed people in low-skill, low-income jobs like the ex-Schlecker employees, many of whom are middle-aged.

The proposed special agency was to have become their employer, paying them nearly as much as their old wages for six months while it retrained them or placed them in new jobs. Ultimately, the costs would have been recovered from unemployment insurance funds.

But Winfried Kretschmann, Green Party premier of Baden-Wuerttemberg state, said this was "not going to happen" after all. Over a week of talks, two states refused to contribute, and Bavaria added Thursday it would not join unless all the states were to participate.

Conservative critics contended the 70-million-euro tailor-made solution was wasteful, with new jobs available and similar assistance for the women already available from Germany's regular labor exchanges.

Raimund Becker, of Germany's Federal Labor Office, said regular exchanges were ready to give priority to the ex-Schlecker staff and help them apply for 25,000 retail jobs that are currently vacant around the country at other companies.

The Free Democratic Party (FDP), a pro-business party in Chancellor Angela Merkel's government, led opposition to the job-placement plan, using its heft in the three state governments to block it. That may help shore up FDP support among business people.

But unions said the lay-off is so huge and the women's prospects so poor that the states must intervene to save them from the dole.

Germany limits unemployment pay to one year, then shifts its jobless onto welfare benefits at a much lower rate. Older workers with few skills living in poverty zones are least likely to find new jobs.

Barring a surprise change of mind in government, the laid-off Schlecker staff are now expected to be dismissed and left to apply for regular unemployment relief.