Initial VET East under new conditions

The GDR had a well-developed system of initial vocational training, which sprang from the same roots as the dual system of education and training in the Federal Republic. Nevertheless, the economic problems in Eastern Germany and specific demographic trends led to considerable difficulties in the introduction of the dual system. These are recapitulated in the paper. At the same time, the paper shows how a variety of tools and support measures have been used in an attempt to address these difficulties. Twenty-five years after reunification, new imbalances have emerged on the training place market, which are named at the end of the paper. Once again they require flexible responses.

Initial situation in the GDR

The GDR school system was already heavily geared towards the future working life of its pupils. The name "polytechnic secondary school (POS)” which was given to the ten year mainstream school was not the only evidence of this. It is also illustrated in a number of other ways including polytechnic education for the senior school years, early-stage career guidance, or the special route of vocational training with Abitur (qualification for entry to higher education). Attempts in the 1960s, however to provide all school leavers achieving the ‘Abitur’ with vocational education training soon proved unsuccessful.

In 1980, 90 per cent of all those completing POS and 82 per cent of all school leavers had an agreed training contract in place. In 1989 this was still 81 per cent of those completing POS and 72 per cent of all school leavers (cf. GRÜNERT 2000, p. 148). There were many reasons behind this slight fall. Besides the expansion of trade and technical school training in certain occupations (since 1976) and the recent uncertainly in businesses regarding their labour requirements, the fall was also due to the mass exodus of young people and in general their growing sense of freedom of choice in that turbulent year.
Company based training in the GDR took place predominantly in company vocational schools and in training workshops of large collective combine businesses. In most occupations this lasted for two years (in 238 of a total of 285 training occupations)¹ . At the end of the training, the young skilled workers were generally taken on by the training company or by the “delegating” company. This was a company without its own training capacity and on whose behalf the training had been completed. Over the four decades for which the GDR was in existence, specific models of close links between the education and employment system became established, heavily influenced by features of a dirigiste and planned economy:

• The state entities devoted significant time and effort to forecasting labour demand in the national economy. They also used this forecasted data both as the basis for capacity planning in the training institutions and transferred it into the workforce planning of the collective combines and the companies.
• For the majority of young people, extensive “external control” of their behaviour in terms of education, training and career choice was accepted as a matter of course. This was no straightforward administrative dirigisme, but the consequence was that the vast majority of young people had very limited options. When exercised, these options also involved very little decision making risk or risk of error (cf. also VONDRACEK/REITZLE 1998).
• The employers, i.e. the companies and collective combines – but also various elements of public service – were therefore able to assume that meeting their labour demand was the overall task of the state – and it was regarded as such – and that they would be actively supported by the relevant bodies (such as schools and universities) in recruiting new staff required to meet their planned targets, and in particular in the territory concerned. They were only required to articulate their own personal economic interests to a very limited extent, unless it was about “campaigning for” sufficient availability of numbers of workers in the planning process.

It was precisely because of its planned economy and dirigiste nature that this structural model of the relationship between education, training and employment involved the significant risk of destabilisation due to profound social change. This did actually prove to be the case after 1989. 

Rapid decline in jobs and training capacity after 1989

The intention was to transfer the dual system of vocational education and training as quickly as possible to East Germany in the process of reunification. The Vocational Training Act and the Crafts and Trades Regulation Code were transferred from the FRG in the summer of 1990 and with it the last East German Parliament thus established the key legal bases in the future acceding territory. Since the vocational training system developed in the GDR shared the same historical roots as the system in the Federal Republic and, in the view of all experts, shared many similarities, very few difficulties were anticipated with the transfer. It soon became evident, however, that such expectations were unrealistic. The difficulties had nothing to do with a lack of acceptance of the dual system or with the training content, but were instead with the economic framework conditions.

Millions of jobs were lost due to mass redundancies, business closures and the breaking up and dissolving of former GDR collective combines. Of the 9.7 million employees in the GDR economy in 1989 (cf. Statistisches Bundesamt 1993 b), 5.8 million were still in “market induced” employment in 1993 (and a further half a million were in publicly supported employment). A large proportion of the training capacity was lost, along with the jobs and the company structures, and without new or spin-off companies in a position to adequately make up the difference.

In 1988, a further 175,000 new training contracts were concluded in the GDR. In 1989, as numerous one-off factors were already taking effect (in addition to a specific decline due to demographic factors), 126,000 training contracts were concluded, plus 10,000 agreements for vocational training with Abitur (qualification for entry to higher education). At the height of the upheaval in initial vocational education and training in 1991, 62,000 new training agreements were concluded with businesses according to career guidance information. Estimates suggest a total of around 73,000 to 75,000. It was possible to provide external training places for 38,000 young people including 20,000 so-called bankruptcy trainees. (cf. BIBB 1992).

The tendency of young people to remain in general education schools for a longer period offered some relief on the training place market initially. Larger proportions of high-performing pupils in a year group were moving on to the Abitur (qualification for entry to higher education). However, the situation remained dramatic. The relief referred to above was in part counteracted by the fact that training under the BBiG/HWO was generally expected to last (once again) for three or even three and a half years, and no longer two years, and it was therefore not possible to fill training positions as frequently.

Emergency measures and early political decisions

The view which rapidly became accepted amongst political decision-makers was that the creation of training positions had to be financially supported (at least temporarily) and that those young people, who despite their best efforts were not finding a training position, had to be "scooped up" and rescued. For this reason, from 1991 onwards, company-based training positions in Treuhand agency businesses, as well as those in private small businesses were funded. As early as 1990 the unification treaty had opened up the opportunity to apply the instruments of the Employment Promotion Act more broadly to finance external training positions.

Influence of the Treuhandanstalt Privatisation Agency on the number of company-based Training positions

The Treuhandanstalt privatisation agency (THA) initially regarded their role as solely being the privatization of formerly state-owned enterprises and not as exerting influence in an organisational sense. The influence of the tense position in the training place market changed all this.
On 22 February 1991, a judgement by the Berlin Regional Labour Court confirmed that the termination of training contracts by businesses was unlawful. In a letter from their HR director dated 6 August 1991, the THA pointed out that companies managed by them were required to complete training contracts which had been started and, if necessary, to train individuals beyond what was required by the company themselves. They announced consequences in terms of staffing for the individuals responsible in the event of further unlawful contract terminations. At the same time, greater value was attributed to the retention of training capacity and services within the THA financing policy. From 1992 onwards, a training ratio of over six per cent was achieved consistently by the remaining THA companies. The THA provided more than 40 per cent of financing as part of liquidity facilities and ring-fenced funding (cf. HANAU 1993, p. 471)

Public funding of Training in private (small) businesses

While the influence of the THA was largely limited to companies which were yet to be privatised, the then Federal Ministry of Education and Science (BMBW) launched a programme for the funding of vocational education in private (small) businesses. Businesses with up to 20 employees were supported with the payment of a one-off subsidy of 5,000 DM for each newly concluded training contract. Over the period of the programme between 1991 and 1992, around 30,000 training contracts where subsidized (cf. GRÜNERT 2000, p. 154). In addition to this, the new federal states began to bring in their own programme to support initial vocational education in private companies. This was initially concerned mainly with the targeted funding

• of specific issues (e.g. newly established training in the company, “additional training” beyond a proportion of trainees in the workforce defined as a limit value),
• of selected target groups (e.g. females in male dominated occupations),
• of businesses in many, but not all, sectors (e.g excluding banks and insurance companies), and in particular small businesses.

The subsidies generally varied between 3,000 and 8,000 DM from state to state and depending on the funding circumstances. In some cases subsidies were able to be accumulated.
This resulted in a framework being established at an early stage in which – even in subsequent years – the interaction of public sector funding measures and business expectations for funding of initial vocational education functioned effectively.

Funding of external vocational Training via the AFG

The Employment Promotion Act (AFG) made it possible to ensure those young people who had received no company-based training positions were placed in funded external training. Based on many years of experience in the Federal Republic, funding was targeted mainly at young people who fell short in terms of personal qualities (Support of Disadvantaged Young People under Section 40c (2) AFG).
Following the unification treaty, the validity of the AFG was transferred to the acceding territory. Modifications applied for a transitional period. This included the expansion of the support of disadvantaged young people to cover those “disadvantaged by the market”, i.e. all young people, regardless of their personal suitability, who were not able to find a training position as a result of the particular situation on the East German labour market (Section 40c(4) AFG/GDR). The fact that these were actually funding instruments for personally disadvantaged individuals and not actually instruments for addressing an exceptional economic and social situation was immaterial given the pressure of the events.
The AFG/GDR ceased to be valid at the end of 1992. This also marked the end of the special funding of “young people disadvantaged by the market” under Section 4 AFG/GDR. It was anticipated that after German unity had been established, problems with adaptation would persist for no longer than one to two years – a hope which proved to be misleading.

Enduring imbalances to the detriment of those seeking training

Closing the training place gap in East Germany remained a constant challenge for almost the next 15 years and a challenge which could only be dealt with using public funds. The causes of this were as much economic as they were demographic (cf. for example also TROLTSCH/WALDEN/ZOPF 2009).

Baby boomer Generation and limited capacity in Business

As early as the 1970s, the leadership in the GDR had decided to institute an extensive package of socio-political measures in order to prevent future labour shortages. Overall, all the measures were very successful. In contrast to other industrial nations at that time, the number of live births rose in the GDR from around 180,000 in 1975 to more than 240,000 at the start of the 1980s and remained at that high level until almost the end of the decade (cf. Statistisches Bundesamt 1993 a). It was then in the 1990s that those in the baby boomer generation moved into the training job market, just as the capacity here had drastically reduced.

The sudden shock of having to adjust – triggered by the currency union and the East Germany economy's direct sudden exposure to the world markets – resulted in total job losses of 40 per cent. Even at the end of the mass redundancies there was barely any demand for new workers. On the one hand, a wide-ranging early retirement programme led to over one million older workers leaving the job market, which meant that in subsequent years there were very few older people retiring from working life. On the other, there was barely any need for expansion in general, despite changes in the economic structure. Staff reductions were achieved mainly by not making appointments to fill positions which became free, which therefore impacted mainly on those entering the job market.

Businesses had little need for additional training under these conditions. The financial support for training beyond what was required by companies certainly had some effect and the few large companies generally certainly had an interest in the continued existence and utilization of their training facilities. Also, the efforts of many businesses to want to “do something for the young generation” in their region should not be underestimated. However, all this would not be sufficient to meet the demand for training from the baby boomer generation.

A landscape of Training Providers

A varied landscape of training providers offering external training positions began to emerge at an early stage. The ZSH survey revealed that half of all providers, offering courses in initial vocational training and/or to support young people in the transition from training to career, were created between 1990 and 1992 and only around one in five were created more recently (cf. WIEKERT 2007, p. 145). The providers had very different roots – e.g. training institutions separated out from businesses, training groups of the Chambers of Trade, branches of established training providers, individual foundations – and found themselves as part of very different funding bodies – if a funding body even existed.

The fact that in the first few years of the new century one in three trainees in the new federal states and in Berlin received external training, while in West Germany the figure was less than five per cent (in Germany overall 10 to 11 %) conveys some idea of the importance of their activities at the time for vocational education and training in East Germany. Of all young people who were current in external training at the end of 2004, over two thirds were completing their training in Eastern Germany.

The external training offered an important buffer in terms of numbers of places available for closing the training places gap. It was worrying however, that just at the time these were most widespread, general problems with acceptance existed among a range of employers. This is indicated by the results of an extensive panel survey of young people in East Germany (cf. PREIN 2005; STEINER 2007): According to this, those completing company-based training had significantly better chances of entering employment than those completing external training, if you excluded those taken on directly by the training company.

From a shortage of training places to a shortage of training position applicants

In the meantime, the situation had fundamentally changed (cf. figure). Generations of low birth rates followed the baby boomer generations in East Germany. The incentives offered to encourage families in the DDR to have children at an early stage were discontinued and this coincided not only with deep-seated feelings of insecurity about the future, but also with opportunities in terms of lifestyle and mobility for many young people. The birth rates fell in just a few years to less than half of the figure for 1989. Young people from these generations have now been leaving school for just short of a decade.

At the same time, demand for the replacement of skilled workers is increasing sharply due to the ageing working population. The favourable economic conditions over recent years have also generated additional demand. Shortages in certain occupations and regions are also becoming apparent. This applies in particular in the area of intermediate qualifications (cf. for example ZIKA/MAIER/HELMRICH 2015). Many businesses – predominantly those with training experience – have taken the view that (increased) internal training was the ideal solution to meeting the demand for new workers (cf. GRÜNERT/WIEKERT 2010), but they are finding it more difficult to fill training positions.

The dual training system in East Germany was initially established as a publicly subsidized system. Great emphasis had been placed in “closing the gap” using external training places. Businesses themselves now have to put their own recruitment policy and their training practice to the test. They have to check the extent to which they can extend the scope of their search in attracting applicants to training positions and how they approach this, i.e. which applicant requirements are essential for them in which occupations, in which circumstances might compromise be possible and where they might be able to improve their own efforts (e.g. in communicating skills and competences which are actually required). They have to reconsider their areas of training cooperation and if necessary create closer relationships with vocational academies and universities of applied science.

These and other challenges are not specific to East Germany. However, as the turnaround in the supply/demand ratio on the training place market can be clearly felt here, and at an early stage, it is certainly worth searching for new approaches which can be applied generally.

HOLLE GRÜNERT
PD Dr., Senior Research Fellow at the Halle Centre for Social Research, Martin Luther University of Halle-Wittenberg

Translation from the German original (published in BWP 5/2015): Martin Stuart Kelsey, Global SprachTeam, Berlin