Article

Thematic feature - unskilled workers

Published: 10 May 2005

In recent years, labour market developments have altered the demand for labour. Increasingly, employers are looking for adaptable workers, with more 'transversal' and 'relational' competences. The nature of skills required to be considered efficient in a job has thus evolved. In this situation, there is a growing risk of exclusion among unemployed workers whose profiles do not match the job characteristics needed, while the low-skilled or unskilled workforce is more at risk of unemployment.

This article gives a brief overview of the industrial relations aspects of the topic of unskilled workers and unskilled work in Germany, as of February 2005. It looks at: national definitions of unskilled workers or work; the number of unskilled workers and workers in unskilled jobs, and the extent of unskilled work; employment and unemployment among unskilled workers; the regulatory framework; trade union organisation among unskilled workers; pay and conditions; recent initiatives to improve the situation of unskilled workers; and the views of trade unions and employers' organisations on the issue and its implications for collective bargaining.

In recent years, labour market developments have altered the demand for labour. Increasingly, employers are looking for adaptable workers, with more 'transversal' and 'relational' competences. The nature of skills required to be considered efficient in a job has thus evolved. In this situation, there is a growing risk of exclusion among unemployed workers whose profiles do not match the job characteristics needed, while the low-skilled or unskilled workforce is more at risk of unemployment.

In this context, in February 2005 the EIRO national centres were asked, in response to a questionnaire, to give a brief overview of the industrial relations aspects of the topic of unskilled workers. The following distinctions are used, where applicable:

(a) an unskilled job is a job which requires, for its proper execution, hardly any formal education and/or training and/or experience;

(b) a worker in an unskilled job is a worker doing such a job, irrespective of their level of qualifications or competences (especially under conditions of high unemployment, a significant share of those occupying unskilled jobs may be 'overeducated' for them, or 'underemployed'); and

(c) an unskilled worker is someone who has only the lowest level of qualifications or education (however defined).

The questionnaire examined: national definitions of unskilled workers or work, including those used or provided in laws, statistics or collective agreements; figures or estimates on the number of unskilled workers and workers in unskilled jobs, and the extent of unskilled work; employment and unemployment among unskilled workers; the regulatory framework, including any specific laws or collective agreements, and trade union organisation among unskilled workers; the pay and conditions of unskilled workers and workers in unskilled jobs, or for unskilled jobs; any recent initiatives to improve the situation of unskilled workers; and the views of trade unions and employers' organisations on the issue and its implications for collective bargaining. The German responses are set out below (along with the questions asked).

Definitions and extent

(a) Please provide a definition of unskilled workers or work (see distinctions above) in your country. Are there any definitions provided in laws, statistics or collective agreements?

There are still some collective agreements in place that refer to 'unskilled work' and 'unskilled workers' when defining the lowest wage categories but, reflecting the fact that all work requires at least some kind of skill, it has become rather uncommon in the German public debate to use these terms, which are considered to be pejorative. More often used is the term 'low-skilled workers' ('Geringqualifizierte' or 'Niedrigqualifizierte') especially where the government, trade unions and employers' associations, as well as academics, refer to those workers who hold jobs that require very litte formal training.

In the employment and unemployment statistics, the term 'unskilled worker' is not used. Instead there is a category called 'ohne Berufsabschluss' (ie without vocational training/qualifications). This category is defined as people who, according to the German 'Microcensus', have no formal professional qualification and have not undergone a training course or placement that lasted at least 12 months. It should be stressed that people with no formal qualifications but with considerable skills due to work experience are included in this category, even if they work in high-skilled jobs - for example in the information technology industries.

The Federal Office of Statistics (Statistisches Bundesamt, Destatis) provides statistics on wages and earnings, split into different categories ('Leistungsgruppen') related to job characteristics. However, as these statistics focus on job characteristics they provide no information about the formal qualifications of the employee. Moreover, these statistics do not cover the whole economy but only a limited range of industries (see tables 4 and 5 below).

(b) Are there any figures or estimates available on the number of unskilled workers and workers in unskilled jobs, and the extent of unskilled work. How have these figures changed in recent years - have changing skill needs or improvements in education/training systems led to a reduction in the numbers of unskilled jobs, unskilled workers and workers in unskilled jobs? Please break all figures down by gender where possible.

The Microcensus asks for the formal occupational education of respondents and not whether the actual occupation of respondents requires certain skills. Therefore it is possible to measure neither how many people work in jobs requiring hardly any or no formal training, nor how many of the jobs available can be considered to be 'unskilled'.

The proportion of employees without vocational training or qualifications slightly decreased from 1991 to 2002 - see table 1 below. About 16% of all employed women in 2002 had no formal qualification, compared with 12% of all employed men.

Table 1. Employees in employment, by possession of vocational training/qualification, 1991-2002 (in 1,000s)*
Year All With vocational training/qualification Without vocational training/qualification**
All With vocational training With university degree All In % of all employees Men Women
1991 35,349 29,751 25,456 4,294 5,598 15.84% 2,564 3,034
1992 35,013 29,520 25,002 4,519 5,493 15.69% 2,550 2,944
1993 34,353 29,118 24,427 4,691 5,235 15.24% 2,479 2,756
1994 34,307 29,233 24,396 4,837 5,074 14.79% 2,409 2,665
1995 34,221 29,323 24,342 4,981 4,897 14.31% 2,351 2,547
1996 34,107 29,365 24,036 5,329 4,742 13.90% 2,285 2,457
1997 33,941 29,513 24,037 5,477 4,428 13.05% 2,115 2,313
1998 33,960 29,567 23,969 5,598 4,393 12.94% 2,155 2,238
19995) 34,429 29,569 23,893 5,676 4,860 14.12% 2,367 2,493
20005) 34,626 29,738 23,906 5,832 4,888 14.12% 2,397 2,491
20015) 34,897 30,009 24,129 5,880 4,888 14.01% 2,363 2,525
20025) 34,662 29,878 24,017 5,861 4,784 13.80% 2,324 2,460

* Excluding military personnel and apprentices; ** all people who say in the Microcensus that they have not received a vocational qualification (ohne Berufsabschluss).

Source: Institute for Employment Research (Institut für Arbeitsmarkt und Berufsforschung , IAB) based on German Microcensus (Zusatzinformationen zum IAB-Kurzbericht Nr. 19/2003).

(c) Please provide figures on employment and unemployment rates for unskilled workers, compared with higher-skilled groups. Have unskilled workers/workers in unskilled jobs been particularly affected by industrial and company restructuring? Have new jobs created in recent years been filled by unskilled workers? Please break all figures down by gender where possible.

Workers without vocational training or qualifications are far more likely to be unemployed than workers with formal qualifications - see table 2 below. The lowest level of unemployment is found amongst employees with university degrees; their unemployment rate is about six times lower than that for employees without vocational training. Especially hard hit by unemployment are male employees without vocational training.

Table 2. Unemployment rate, by possession of vocational training/qualification, 1991-2002 (in %)
Year All With vocational training/qualification Without vocational training/qualification
All With vocational training With university degree All Men Women
1991 6.9 5.4 5.6 4.0 14.5 15.1 14.1
1992 7.6 5.7 6.1 3.5 16.9 17.4 16.4
1993 9.1 6.8 7.3 4.1 20.3 21.3 19.4
1994 9.2 6.8 7.4 4.0 21.0 22.2 19.9
1995 9.3 6.8 7.4 4.0 21.9 23.2 20.7
1996 10.1 7.4 8.1 3.7 24.2 26.0 22.3
1997 11.3 8.3 9.3 4.0 26.9 29.2 24.6
1998 10.5 7.6 8.5 3.4 25.8 27.5 24.2
19995) 10.3 7.7 8.7 3.4 23.4 25.1 21.7
20005) 9.6 7.1 8.1 2.9 22.2 23.8 20.6
20015) 9.7 7.3 8.3 3.0 22.1 24.4 19.8
20025) 10.2 7.9 8.8 3.7 22.6 25.4 19.7

Source: IAB based on German Microcensus (Zusatzinformationen zum IAB-Kurzbericht Nr. 19/2003).

Overall, more than a third of all unemployed people have no vocational training - see table 3 below. However, the proportion of unemployed people without vocational training/qualification decreased between 1991 and 2002. Due to lack of data, it cannot be stated whether new jobs created in recent years have been filled by unskilled workers or not.

Table 3: Unemployed people, by possession of vocational training/qualification (in 1,000s), 1991-2002
Year Unemployed people Unemployed people without vocational training/qualification Proportion of unemployed people without vocational training/qualification
1991 2,638 952 36.1%
1992 2,894 1,114 38.5%
1993 3,447 1,332 38.6%
1994 3,493 1,349 38.6%
1995 3,521 1,374 39.0%
1996 3,848 1,511 39.3%
1997 4,308 1,630 37.8%
1998 3,965 1,531 38.6%
1999 3,943 1,482 37.6%
2000 3,685 1,396 37.9%
2001 3,742 1,386 37.0%
2002) 3,942 1,396 35.4%

Source: IAB based on German Microcensus (Zusatzinformationen zum IAB-Kurzbericht Nr. 19/2003).

Regulation and conditions

(a) Is there a specific regulatory framework in your country concerning unskilled workers and workers in unskilled jobs (however defined)? Are there specific laws or collective agreements? Are there specific trade union organisations for them, or are they represented in 'normal' union structures. Have there been any changes in these area reflecting the changes referred to in question (b) under 'Definitions and extent' above?

There is no specific regulatory framework concerning low-skilled workers in Germany. Most collective framework agreements on pay, which define different pay categories, refer amongst other aspects to the qualifications of workers. For the construction industry, there is a collectively agreed minimum wage for workers without vocational training (DE0311204F and DE0206204F).

Trade unions organise all workers regardless of their qualifications and there are no special organisations for so-called unskilled workers.

(b) Please provide any figures available for the pay of unskilled workers and workers in unskilled jobs, or for unskilled jobs, and the relationship of this pay with the average or with higher-skilled groups. Do collective agreements contain specific pay grades for unskilled workers, or workers in unskilled jobs? Please break all figures down by gender where possible.

Employees in low-skilled jobs in general receive lower wages than those employees in high-skilled jobs - see tables 4 and 5 below. The pay gap is especially marked for white-collar employees in low-skilled jobs who, according to the latest figures for July 2004, earn about 45% less than the average white collar employee. There is a caveat, however, that the statistics on earnings only cover certain industries - in the case of blue-collar workers only manufacturing and extractive industries. There are no gender specific-data available but as there is a general gender pay gap in Germany (DE0404205F) it can be assumed that women without vocational training/qualifications receive lower pay than their male co-workers.

Table 4: Average wages of white-collar employees* in low-skilled jobs** (manufacturing and extractive industries, commerce and finance), July 2004 (in EUR)
Employees concerned as % of all white-collar employees in the industries concerned Gross monthly wage % of average gross wage
Germany 3 1,836 54.2
West Germany 3 1,857 53.5
East Germany 2 1,608 62.6

* Excluding part-time employees, apprentices, working family members; ** jobs that do not require formal vocational training (Berufsausbildung) (defined by Destatis as 'Leistungsgruppe V').

Source: Destatis (Fachserie 16, Reihe 2.2).

Table 5: Average wages of blue-collar workers* in low skilled jobs** (manufacturing and extractive industries only), July 2004 (in EUR)
. Workers concerned in % of all blue-collar workers in the industries concerned Gross hourly wage Gross monthly wage % of average gross wage
Germany 14.2 12.28 2,033 81.0
West Germany 14.7 12.62 2,082 80.0
East Germany 10.9 9.29 1,592 83.0

* Excluding part-time employees, apprentices, working family members; ** jobs that do not require any vocational training (defined by Destatis as 'Leistungsgruppe 3').

Source: Destatis (Fachserie 16, Reihe 2.1).

(c) Are there any differences between unskilled workers/workers in unskilled jobs and higher-skilled groups in terms of access to other benefits, social security, pensions, etc? Please break all figures down by gender where possible.

Access to all types of statutory benefits, social security and pensions is dependent neither on qualifications nor type of job.

Actions and views

(a) Please describe any recent initiatives taken jointly or separately by companies, public authorities (national or local) or the social partners (eg collective agreements) to address the situation and improve the situation of unskilled workers in terms of pay, working conditions, training, employability, unemployment etc.

There have been no recent initiatives to address specifically the situation of low-skilled workers. The current 'red-Green' coalition government, however, states that its labour market policies, such as subsidising low-wage jobs (DE0005260F), and its legislation, such as the 'Job-AQTIV' Act (DE0111203F) of 2001 or the 'Hartz' Acts (DE0311101N and DE0212203N), were designed to promote the integration of long-term unemployed people into the labour market. The Federal Ministry of Economics and Labour (Bundesministerium für Wirtschaft und Arbeit) stated in its Annual Economic Report for 2004 that the highly controversial merger of unemployment assistance and social assistance (DE0401205F and DE0409204N) aimed to help the integration of low-skilled workers into the labour market.

Various collective agreements, such as those in the chemicals (DE0307205F) and metalworking industries (DE0107233N) address issues of skills/qualifications, though these cover all employees. An increasing number of collective agreements provide for special lower pay rates if long-term unemployed people are offered a permanent employment -an example is the chemicals industry (DE0406205F).

The German Metalworkers' Union (Industriegewerkschaft Metall, IG Metall) in the state of Baden-Württemberg has supported the initiatives of works councils and management in some metalworking companies to improve the labour market position of low-skilled workers by way of further training.

(b) Please summarise the views of trade unions and employers’ organisations on the issue and its implications for collective bargaining.

According to Dieter Hundt, the president of the Confederation of German Employers’ Federations (Bundesvereinigung der Deutschen Arbeitgeberverbände, BDA), the 'Hartz' legislation fell short of employers' expectations and will not help to improve employment of low-skilled workers. The president of the Confederation of Germany Industries (Bundesvereinigung der Deutschen Industrie, BDI), Michael Rogowski, has demanded in an interview a loosening of the statutory protection against dismissal, the creation of a 'low-wage sector' and further working time flexibility as a means to create more employment opportunities for low-skilled workers.

The vice-chair of the Confederation of German Trade Unions (Deutscher Gewerkschaftsbund, DGB), Ursula Engelen-Kefer, declared in 2000 in a statement that DGB rejected the general promotion of a low-wage sector but would give support to subsidising low-wage jobs in order to help low-skilled workers to find new employment.

The unemployment 'trade group' within the United Services Union (Vereinte Dienstleistungsgewerkschaft, ver.di) was highly critical of the recent merger of unemployment assistance and social assistance and stated that the increased pressure on unemployed people to accept any legal employment regardless of their personal qualifications would to lead to a de-skilling of workers and to the replacement of even more low-skilled workers.

About 5,000 employees of institutions that provide further training, supported by the German Union of Education (Gewerkschaft Erziehung und Wissenschaft, GEW), held a rally in December 2004 against the cutting of funds for further training within the budget of the Federal Employment Agency (Bundesagentur für Arbeit, BA).

Comments

The main problem for low-skilled workers in the current German economy is certainly the high level of unemployment. Whether this will be reduced by the recent labour market legislation is questionable. The major problem on the labour market is that there is a lack of jobs in general and that more highly educated employees are finding themselves compelled to take on jobs below their educational level, replacing employees with a lower level of education in some sectors. It remains to be seen how unemployment figures will develop. However, the reduction of public funding for further training is likely to further reduce the prospects of low-skilled unemployed people re-entering the labour market. (Heiner Dribbusch, Institute for Economic and Social Research, WSI)

Eurofound recommends citing this publication in the following way.

Eurofound (2005), Thematic feature - unskilled workers, article.

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