Schröder Gets Tough on Traineeship Deficit

German Chancellor Gerhard Schröder met with the heads of the country’s trade unions after a two-month break on Monday.

Unlike past acrimonious meetings dominated by strident opposition among the unions to the chancellor’s raft of economic and labor reforms, this time the two sides were in consensus on a key issue plaguing the labor market: the dire lack of apprenticeships for Germany’s high school graduates.

Schröder, who had vowed an "open dialogue" with the trade unions about his "Agenda 2010" economic reforms ahead of Monday’s talks, showed himself willing to listen to the unions’ grievances about the disastrous apprenticeship situation. The chancellor admitted there was a problem. "It has to get better," Schröder said after the meeting.

With thousands of high school graduates expected to be in search of an apprenticeship this autumn, the chancellor appealed to companies to fulfill their obligations in filling apprenticeship spots and threatened that "legal measures would be necessary" if businesses failed to create more opportunites voluntarily.

Punishing companies for not hiring apprentices

Trade unions in Germany have long been demanding the imposition of a fine on companies that didn’t train graduates or offered few apprenticeships.

In a television interview last week, Schröder emphasized that "those who trained apprentices, should be given a respite, while those who refuse to hire apprentices, should be reined in." He refused to say how exactly the government expected to push companies to hire apprentices. "This is a question of solidarity, I don’t what to talk of force," Schröder added. The chancellor added on Monday that if companies were indeed fined, it would have to be done on a branch specific basis and made as unbureaucratic as possible.

Schröder also made clear that companies had a deadline of September 30 to fill in apprenticeships, but added it wasn’t an ultimatum and that apprentices could be hired even after that date.

Trade unions gleeful about chancellor's stance

The chancellor’s stance and "clear words" have been welcomed by the unions. Though trade union leaders reiterated their vehement opposition to the chancellor’s "Agenda 2010" labor reforms, they were clearly pleased with Schröder’s pro-union position when it came to apprenticeships.

Frank Bsirske, head of the country’s largest services union, ver.di, said he hoped it would help guide young people out of a "working trap" and stressed he was in favor of introducing a penalty on companies which were not doing their bit in hiring apprentices. Michael Sommer, head of the German Federation of Trade Unions (DGB), pointed out that there was a shortfall of 113,000 apprenticeships at the beginning of the month and said he expected a further 10,000 young graduates to be looking for an apprenticeship by the end of September.

Industry leaders up in arms

But Schröder’s latest move to end graduates’ job misery and to lay the groundwork for a solid and well-trained workforce has rubbed industry leaders up the wrong way at a time when they are already suffering in these bleak economic times.

Dieter Hundt, head of the Confederation of German Employers’ Association, told the daily Berliner Zeitung that "repeated threats" from trade unions and politicians to fine companies not hiring enough apprentices was "highly counter-productive" and would lead to less apprenticeships, not more. Dieter Philipp, president of the German Skilled Trades Association, said, "Such threats only lead to the fact that companies increasingly hold back with hiring more apprentices."

Unexpected support for companies has come from within Schröder’s own Social Democrat ranks, with German Economics and Labor Minister Wolfgang Clement saying he feared a state-run apprenticeship program if the government decided to fine companies for not hiring trainees. Clement said he was skeptical about the effectiveness of legal measures and said he was sure that companies and commerce chambers would create more apprenticeships. "I belong to those who are convinced that acting voluntarily is better, it promises more success."

However a report in the Frankfurter Allgemeine Sonntagszeitung on Sunday threw a pall on the hopeful outcome of the meeting between the chancellor and the unions. The paper said that numerous large companies would be hiring less apprentices this year as compared to 2002. Among those listed were Deutsche Bank, Commerzbank, insurer Allianz, Lufthansa (photo), Siemens, trucking company MAN and software giant SAP.