Youth Unemployment Crisis and Germany

     To what degree did the recession create the youth unemployment crisis? Clearly, the recession has a negative impact on the number of jobs that are available due to layoffs and closures. Also the individuals applying to those jobs are both new graduates with limited experience and established professionals reentering the workforce, further limiting availability. Another correlation between the recession and the unemployment crisis is the longer period of time that potential retirees are staying at their positions. Yet, these are issues that countries around the world are dealing with but not every country is failing as completely as Greece or Spain. Even the U.S. and Canada, while doing considerably better than the aforementioned countries, have nothing to brag about. Germany, however, has managed to outperform every other country in youth employment. So what is the variable that allows for some countries to successfully employ their youth while others can not?

     According to an article posted on the Deutsche Welle the answer is their dual training system. The story was written by Dr. Hilmar Schneider who is the Director of Labor Policy at the Institute for the Study of Labor. Dr. Schneider wrote that through the program students "simultaneously earn academic credentials along with gaining work experience, rather than attending classes alone, like in many other countries." The benefits to this education system include bringing applicants closer to the job market and ensuring that current qualifications are more reliable. It also lets employers spend more time with potential employees in order to gain insight into their potential for development, thus reducing the risk to employers.

Metal-working apprentices train in Leipzig, Germany, in 2010. Germany has Europe's lowest youth unemployment rate, thanks in part to its ancient apprentice system, which trains about 1.5 million people each year. (Waltraud Grubitzsch)

     Germany has what is referred to as a strongly regulated job market, which means that companies are not able to easily fire employees. Typically this means that it's more difficult for young people to find jobs because fewer employers are willing to take a chance on a worker that has no experience. Dr. Schneider writes that Germany has managed to solve this issue with the adoption of the duel training system:

Without the duel training system, Germany's youth unemployment rate would likely be similar to that of France of Italy. It is the necessary answer to a strongly regulated job market. And without tight controls on firing workers, the duel training system would probably not exist because when companies have the ability to part with employees more or less at will, the risk of making bad personnel decisions becomes less weighty. The necessity of financing a costly internal training system evaporates. In Germany, job market regulations and the duel training system have apparently formed a fruitful symbiotic relationship.

     This system may not be the only reason that Germany is prospering while other countries struggle. Ian Traynor, the Guardian's European editor, explains that labour in Germany is roughly 10% undervalued - while workers in Spain and Greece are paid 20% and 30% too much, respectively. Traynor writes, "radical welfare and benefits cuts and labour market reforms almost a decade ago [...] combined with the downward pressure on wages from cheap labour competition in central Europe have kept pay relatively low and employment high." The story goes on to explain a number of downsides to the country's success including; no minimum wage, low female participation in the workforce and an increase of working poor as a result of the boom of mini-jobs. In fact, a recent survey showed that half of the female workforce in Germany were in part-time, low pay sector jobs. For the full story visit the Guardian.co.uk.

This chart shows the basic path of the German education system, in which students have a variety of options leading to different career fields.

     NPR's Eric Westervelt recently wrote an article about the long-term benefits of Germany's duel training system, an educational path that 60 per cent of the country's high school graduates choose. In addition to on the site training, students are paid a portion of the starting wage that they can expect to earn upon graduation; typically 680 euros a month ($900). Westervelt also writes that Germany is one of the last Western countries to offer the majority of its skilled industrial workers the elusive "job for life", something that has long since vanished from other countries. The program has seen tremendous success as it trains 1.5 million people annually, with 90 per cent of apprentices successfully completing their training. The length of the program lasts anywhere from two to three-and-a-half years and according to Germany's records about half of the apprentices stay on with the company that trained them. Visit NPR.org for the full article.

"Solidarity instead of rivalry", demonstration in 2009.

   
     Not everyone agrees with the benefits for the duel training program. Vincent Venus, editor-in-chief of the German edition and board member of JEF Germany, wrote that many young people in Germany are parked in the duel training system. He states that the system does not guarantee entry to the job market and that much more than the official 8.5 per cent of young people are at risk of unemployment. Venus also quotes the Konrad-Adenauer-Foundation as saying that 40 per cent of the teenagers leave the system without being able to begin a proper professional training.

     In the comments section of the article Venus addresses other issues with the apprenticeship program. He states that only 22.5% of firms have job opportunities for young people, in the industrial sector the number is only 11%. He goes on to write that some of the students are wasting their time because after they complete their apprenticeship they have to choose a second one or return to school. Venus concludes by stating that the lack of general education and the stratification of the education system makes it necessary to go to school again, which for many means double a secondary education. To read Venus' article visit thenewfederalist.eu.

Germany is envied for its top notch system of vocational training, which develops young people with 'employable skills'.

     As you can see opinion on the success of the duel training program is divided. While some praise the education system for reducing unemployment amoung youth, others believe that it is an outdated and counter-productive program that leaves many searching for jobs. Venus writes that the reason the unemployment numbers are so low is because those enrolled in the system or repeating their secondary education are not included in the official report. It's difficult to know where to stand on the issue but it's clear that policy-makers need to begin looking outside of their comfort zones in order to find a solution to the unemployment crisis that remains unsolved and under-reported.