NCPA - National Center for Policy Analysis


July 16, 2004

With German economic growth averaging just 0.3 percent a year since 2001, and unemployment in May at 10.5 percent, the Social Democrat-Green Party ruling coalition is poised to levy an apprentice fee that businesses say would worsen the prolonged stagnation. Business protests have led to a delay in imposing the fee, but the threat still looms large, say observers.

  • Most companies with 11 or more workers that do not employ 7 percent of their work force as apprentices would be forced to pay 3,500 euros a year for each missing apprentice.
  • For big employers like DaimlerChrysler, based in Stuttgart, the yearly payments could top 1 million euros.
  • Business groups and opposition conservative lawmakers are threatening lawsuits if Chancellor Gerhard Schroder imposes the fines, which would be used to pay for two- to three-year apprenticeships for what the Bonn institute estimates are 35,000 to 100,000 teenagers without trainee jobs.

At its core, the law seeks to address the plight of Germany's vaunted vocational training system, which took shape under medieval craftsmen and today still relies on apprenticeships as the gateway to full-time employment. Even today, Germans seeking to work as bank clerks, restaurant cooks and bakers must first complete an apprenticeship.

But as the economy began to slow in 2000, businesses cut back. This year, they are offering only 1.6 million paid apprenticeships, down from 1.8 million in 2000, according to the Bonn vocational institute. That has left as many as 100,000 people between the ages of 17 and 25 without prospects.

Source: Kevin J. O'Brien, "Lessons in Reality for Apprentices," New York Times, July 13, 2004.


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