Number of vocational training places offered by employers declines

According to figures published in September 2002, the number of vocational training places offered by German firms has fallen significantly (by 7.3% over a year), and 137,000 young people are still looking for an apprenticeship. In August, the government-appointed Hartz Commission issued proposals for a radical reform of the labour market, including measures to increase the number of training places and cut youth unemployment.

On 5 September 2002, the Federal Employment Service (Bundesanstalt für Arbeit, BA) published figures on the situation in the apprenticeship market - see table 1 below. According to the data, from October 2001 to August 2002, 557,425 training places were officially registered by the BA - a decline of 7.3% in comparison with the previous year. Training places in firms - and particularly in industry and commerce, as well as crafts - fell while the number of government-sponsored training schemes (außerbetriebliche Ausbildungsstellen) increased. At the end of August 2002, more than 137,000 young people were still looking for a training place, while at the same time only about 59,000 unfilled training places were registered by the BA.

Table 1. Officially registered training places and candidates for training places in August 2002
. Germany Change from previous year Western Germany Change from previous year Eastern Germany Change from previous year
No. of training places 557,425 -7.3% 462,462 -7.0% 94,963 -8.6%
- of which, No. of training places in firms 520,571 -7.6% 450,805 -7.1% 69,766 -10.4%
No. of candidates for training places 691,462 -3.4% 491,131 -3.4% 200,331 -3.5%
No. of unoccupied training places 59,377 -22.3% 50,567 -24.6% 8,810 -5.9%
No. of candidates for an apprenticeship without a training place 137,204 1.5% 91,877 3.2% 45,327 -1.9%

Source: Federal Employment Service.

Background

Nearly every year there is a gap between the number of applicants for training places and the number of apprenticeship places offered by employers. In July 1999, to ensure an adequate provision of training places, the tripartite Alliance for Jobs, Training and Competitiveness (Bündnis für Arbeits, Ausbildung und Wettbewerbsfähigkeit) agreed a 'national consensus on career training' (Ausbildungskonsens) (DE9907219F) which aimed to provide a training place for every young person who was willing and able to participate. In addition, an 'immediate action programme for young people' (Jugendsofortprogramm, JUMP) was launched in 1999 (DE0007272F) and later renewed until 2003 - for which a yearly budget of over EUR 1 billion has been provided. The JUMP programme seeks to: improve the chances of unemployed young people finding a job by providing them with qualifications; promote internal vocational training within firms; and support young people who have to move to find a training place.

Particularly in eastern Germany, government-sponsored apprenticeships are important. In 2001, about 28.3% of apprenticeship agreements were government-sponsored in eastern Germany, compared with 4% in western Germany. Furthermore, there are regional differences due to the different situations on the apprenticeship market: while in Bavaria only 2.3% training places were government sponsored, the figure was 33.7% in Brandenburg.

In July 2002, the unemployment rate of young people under the age of 25 stood at 10.6% (8.5% in western and 18.3% in eastern Germany). In September 2001, more than half (54%) of the 470,000 unemployed people under 25 had received no vocational training - see table 2 below.

Table 2. No. of unemployed people under the age of 25 and without any vocational training 1998-2001
. Males Females Total
. Total Without vocational training Total Without vocational training Total Without vocational training
1998* 265,570 160,604 209,112 102,377 474,682 262,981
1999* 251,822 155,158 194,974 96,324 446,796 251,482
2000* 258,011 151,522 188,370 95,565 446,381 247,087
2001* 277,662 159,319 193,409 95,945 471,071 255,264

* From October to September.

Source: Federal Employment Service.

Proposals

On 16 August 2002, the so-called Hartz Commission presented a report which proposes the most radical reform of Germany's labour market yet, designed to reduce persistent unemployment (DE0209205F). The commission, led by Peter Hartz, head of the personnel executive committee at Volkswagen, was appointed by Chancellor Gerhard Schröder. One of the report's 13 'innovation modules' contains proposals to reduce unemployment among young people and to promote more vocational training places within firms. The aim is to enable each young person to enter working life and thus participate in society.

One of the main proposals is to create more vocational training places within firms through financing via a so-called 'training time voucher' (AusbildungsZeit-Wertpapier, AZWP). The main features of the scheme are that:

  • the AZWP would be personal and earmarked for the individual concerned, and would guarantee the holder a training place;
  • the AZWP would be financed by a nationwide 'trading stamp' system (Rabattkartensystem). Parents, grandparents, relatives and so on could contribute to a young person's AZWP, while there would also be subsidies from the BA and donations;
  • all contributions would be voluntary and a 'training levy' (ie obliging companies that do not offer apprenticeships to contribute to a fund to finance apprenticeships in other establishments or external training places) is excluded;
  • only those companies offering new or additional apprenticeships would be allowed to participate in the scheme; and
  • the scheme would be implemented by local or regional foundations.

Positions

Reacting to the shortfall in training places, Georg Braun, the president of the German Association of Chamber and Commerce (Deutscher Industrie- und Handelskammertag, DIHT), made an appeal to employers to strengthen immediately their commitment in a 'final sprint' (Endspurt) to provide a sufficient number of apprenticeships up to the start of the new training year in September 2002. The 'apprenticeship gap' is caused not only by the economic situation but also by a lack of maturity among the candidates and the late introduction of new training subjects, according to Mr Braun.

With regard to the Hartz Commission's proposal for an AZWP training time voucher, the Confederation of German Employers' Associations (Bundesvereinigung der Deutschen Arbeitsgeberverbände, BDA) described this as a further measure to open up new sources to finance apprenticeships within firms. Subsidies from the BA for the new scheme are, however, equivalent to a partial training levy for the additionally-created training places and this could result in a restraint on employers by creating non-subsidised training places, according to BDA.

The IG Metall metalworkers' trade union criticised the major decline in the number of training places and rejected the Hartz Commission's AZWP proposal, because it believes that this involves privatisation of the responsibility for vocational training: young people and their families would pay for the training themselves, while employers would be let off the hook as regards vocational training. Referring to a judgment issued by the Federal Constitutional Court (Bundesverfassungsgericht) in 1980, IG Metall stated that the responsibility for a sufficient supply of apprenticeships lies with employers, because it is in their hands to allocate, create and offer apprenticeships.

Moreover, IG Metall sees the Hartz Commission's proposals as being in competition with the current dual system of vocational training (ie practical training provided and paid for by employers, and general and theoretical training provided in public institutions), and believes that in the medium term they would result in a further decline of training places in firms, and in a new financing system for training, in which employers and public authorities would no longer take responsibility. For this reason IG Metall and the Unified Service Sector Union (Vereinte Dienstleistungsgewerkschaft, ver.di) support a 'Bonus-Malus' system - ie establishments offering training places would be supported and rewarded while those who do not would be punished, thus creating a balance of interests between establishments that fulfil their responsibility and those that do not.

Commentary

The high number of young unemployed people indicates that the 'token' measures taken so far have not been able to solve this problem. Particularly for young people, the chances of entry into working life depend substantially on entry into vocational training. The decline of training places within firms (only a quarter of companies in Germany now offer vocational training places) shows that companies' readiness to invest in future specialists does not exist to a sufficient degree. However, it is still primarily the responsibility of employers to provide an adequate number of broad-based training places, because they demand and need skilled employees. To stop the trend of a falling number of training places, measures have to be introduced which force employers to ensure a sufficient supply. Moreover, due to the insufficient supply of apprenticeships, employers are preventing young people from having the chance to take control of their lives, to complete vocational training and to achieve social participation. (Verena Di Pasquale, Institute for Economic and Social Research, WSI)

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