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Germany - Labor
Among the principal reasons for the decline in Germany's economic growth have been the high costs associated with production. German labor costs per hour in the manufacturing industry have achieved the dubious honor of being the highest in the world--largely because of high social costs. As the Bundesbank's tight money policies have consistently made the deutsche mark ever stronger, German labor costs have grown even higher against those in other countries. In part because of the rise in the value of the deutsche mark, total German wage costs were estimated by 1992 to be about 50 percent higher than in the average West European state, the United States, or Japan, and many times higher than those prevailing in most Asian states, in Eastern Europe, or in the developing world. The Bundesbank estimated that those costs had risen by almost 10 percent between the beginning of 1991 and the beginning of 1993. Chancellor Kohl himself complained that German workers could not afford to continue to have "the shortest working week, the lowest number of working years, and above all, which is the worst, the shortest machine operating time . . . in all the European Community." But, although a number of German wage settlements in 1993 and 1994 raised wages by less than the anticipated inflation rate, there are no signs that German labor is prepared to lower its income to meet international competition. The average German worker believes that quality production and efficiency justify his or her high income.
German workers have consistently had the highest level of education of any group of workers in Europe, with much of that education acquired after they finish formal secondary school training. Worker training usually lasts two to three years and may last longer for highly specialized vocations (see The Education System, ch. 4). About 2.5 million Germans, or almost half of the fifteen- to nineteen-year-old age-group of both genders, annually receive vocational training within a range of about 400 designated occupational specialties, often on the basis of contracts with preselected employers.
Many of the generalizations that can be made about German labor cannot be applied equally to the foreign workers who constitute about one-tenth of the country's labor force. The 2 million foreigners employed in Germany often work in very large companies, on assembly lines, in mining and chemical operations with little prospect for advancement, or in some service sectors at menial tasks under difficult conditions. Approximately 25 percent of foreigners work in steel and iron foundries, another 25 percent in hotels and restaurants (often as cleaning staff), and another 15 percent on automobile assembly lines. Certain industries, such as steel production, textiles, or mining, could not function without them.
German labor has as much of a culture as German management. The abilities and the attitudes of the labor force have contributed at least as much to the success of the German system as those of management, and perhaps even more so. Many workers, especially in small- or medium-sized firms, regard themselves as serious professionals with a stake in their company and are usually treated as such. They live in comfortable circumstances, not as the factory workers of old. They usually travel abroad, often own foreign property, and otherwise lead lives that had formerly been reserved for the middle class.
Of the many fields to choose from in German vocational training, most apprentices select from about twenty specializations. Young men prefer training in manufacturing, crafts, carpentry, electronics, or painting. Young women prefer training in sales, industrial purchasing, officework or banking, or medical assistance. Even while they are in training, the students might receive up to DM1,200 in salary per month, although most receive less than that, down to DM255.
After finishing vocational training, students can go to technical colleges located all over Germany, or to public health or nursing colleges, and they can move on to advanced specialization courses in programs for continuing education. Those systems exist separately from academic colleges and universities but can be as demanding.
More about the Economy of Germany.
The high level of training of German workers produces a "quality time" labor productivity formula. The German worker spends fewer hours per year at work than any competitor, averaging an annual 1,708 hours compared with 1,763 in France, 1,778 in Britain, 1,912 in the United States, and 2,166 in Japan. Yet Germany has the highest share of world trade in goods with a high skill content: 20 percent, as against 17 percent for Japan, 15 percent for the United States, and 7 percent for France.
The programs are expensive for industry as well as for government. One estimate was that West German industry before unification spent about DM35 billion annually to support the program. The philosophy governing the expenditure of time and money was articulated by the head of personnel at Volkswagen, who said: "Training costs money; not to train costs a great deal more money."
Many of western Germany's labor traditions have moved smoothly to eastern Germany since unification. Vocational training already existed in the GDR, and labor in East Germany was not as inefficient as management or as the often antiquated production machinery. Therefore, although there have been problems of adjustment, especially for older workers in the east who were not accustomed to the pace of a modern production site, on the whole the eastern labor force has adapted well.
You can read more regarding this subject on the following websites:
German Labor and Employment Law: issues concerning the set
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