How has Germany been able to maintain their heavy industry?

Is there anything in Germany like Affirmative Action for minorities? If we did that int he US, we would inevitably have a higher proportion of minorities in the trade school track, and there would be howls of racism and discrimination.

BTW, I’ve always admired the apprentice program in Germany. It’s a recognition that there isn’t some strict dividing line between school and work. In the US we tend to think of work as something you don’t do until you’re finished with school. It’s a crazy attitude, really.

Some minor corrections, Kevbo, if you don’t mind. Our school system is structured into four Stufen (phases): the Primarstufe (primary education) starts after the Kindergarten for children at the age of 5 to 6 and lasts usually four years. An evaluation of their abilities determines the kind of school they are going to attend next in the Sekundarstufe 1, the secondary education: Sonderschule (special school) Hauptschule, Realschule, Gymnasium or Gesamtschule (a mix of Realschule and Gymnasium).

In the past (up to the late 80s), the Hauptschule was a working alternative for children who showed no talent or interest for academic studies. They focused on the necessary knowledge and skills to learn a craft.

Today, however, the Hauptschule is often called Restschule (“leftover-school”) because it has turned into a kind of collecting tank for all the … problematic children. The share of children of guest-workers who failed to integrate their children (they often speak broken German) is high, as is the proportion of children with an attitude that borders on the anti-social.

Their future prospects are lousy and too often they are headed towards casual labor at best, welfare most frequently or criminality. We have already realised intellectually that the costs for society resulting from this breakdown are much higher than more tax-money for a promising education but the realisation has not yet turned into political action. It’s going to be one of the major tasks for our school system to turn the tide there and restore some prospect for the “left-overs” and, consequently, reduce their numbers considerably.

The Realschule is still the most common preparation for children who head towards some kind of trade.

At the end of the 10th year of education, they usually choose for their Sekundarstufe 2 a technical college, but the more academic types can switch to the Gymnasium to attend the Oberstufe, the senior classes that are necessary to take one’s high-school diploma.

They can also follow higher levels of technical college education and prepare, like the children at the Gymnasium, for the Tertiärbereich: either the university of cooperative education or more academic universities that are usually pooled together under the term of Hochschule. So, the Hochschule is NOT necessarily the “trade school track”; it’s also the academic or artistic track for the dedicated learner.

The Gymnasium has also declined a bit due to a lack of money for education. When I went to a public “Humanistisches Gymnasium”, it was a prestigious option and a good choice for a solid academic preparation.

But I was less than satisfied with any public Gymnasium close to our home when my oldest was ready to choose a school and we decided to opt for a private Gymnasium. It allows only gifted children to attend and offers a much better and far more rigorous education than the public schools.

Politically, I don’t like it because such schools are far less socially heterogeneous than the schools I attended but I didn’t want her to be bored by the snail pace of the present public education and its prestige is a door opener, for sure.

Our “duale Berufsausbildung” with its practical and academic program is still a crucial reason for the comparatively high level of skill and education of our job starters. But it’s in deep trouble because companies have abandoned many apprentice programs and more and more rookies can only show an academic preparation in their vita – which isn’t enough for the same companies that abandoned the apprentice programs to hire them.

We are currently trying to reinstitute more apprentice programs but it’s not working well. Many companies that once showed a lot of social responsibility and economic foresight are, as one of my friends in the Department of Commerce puts it, “infected by the neoliberal virus” of total profit maximisation. Even some companies that are already in trouble because they don’t find the highly qualified craftsmen any longer to produce their goods are hard to convince to train the next generation … it costs money now, after all. Taxpayer-money helps, of course, but it’s a shitty solution.

A more sophisticated approach to a solution is the “triales Ausbildungssystem”, which tries to establish a network of apprentice and training programs that interlinks whole industries – but it’s still too early to tell if this will do any good.

The main problem for minorities isn’t not making the academic track but not making the trade school track (i.e. not getting into an apprenticeship.) A major problem in the future for the German economy IMO is that jobs that can be done by non-qualified people (say, below journeyman level) are shrinking - 20% now, less than 10 % in a few decades. An acquantance of mine, a Hauptschule teacher, says her students need a ‘2’ (~ ‘B’) in maths to get into a meat salesperson apprenticeship (a three-year-program to make journey(wo)man meat seller).

Before people get too starry-eyed over ze Germans, I feel it necessary to point out a couple things. German unemployment has been around 7%-11% for the past decade. Our unemployment tends to stay around 5% with occassional spikes during recessions.

So while people bitch and moan nonsense about our current high employment being “permenant”, history has shown that is not the case. Germany (as with many other countries in Europe) does have an effectively higher permenant unemployment rate, mostly caused by labor policies that make their economy less flexible.

It’s an attitude born of entitlement and elitism. People aren’t going to college to prepare for a career. They are going to avoid one. You see it right here on this board with people who are like “college should not be a trade school for corporations”. Then they take out a hundred grand in loans to study bullshit no one will hire them to do when they graduate.

Yes, our unemployment rate is pretty high. But you seem to miss a couple of important differences between the USA and Germany in this regard that shift the impression: a good portion of the current unemployment is still a consequence of the Wiedervereinigung, the German reunification, 20 years ago. We didn’t know then but realised soon enough that we added a small but bancrupt country with a mouldering infrastructure, worse than obsolete industry and a pool of employees who had to adjust far more than we all expected.

The reunification was absolutely essential but it was also a financial nightmare – even our beloved D-Mark had a hard time to stay stable since the exchange rate between their currency and ours was far too generous and led to the first but not the last horrible drainage of taxpayer money.

And though things have improved a lot and the eastern states are already modernized (their infrastructure is in fact nowadays on the average better than the western ones), we are still paying a high price for the adaptation and consolidation since the money that was spent their couldn’t be used to realise the plans to re-structure the industry and change the tax system - as was planned in the 80s.

There are also major differences in the definition of unemployment and the generosity of the unemployment program that makes it far more interesting for people in Germany to be considered unemployed by the state.

But if you take a look at the past one and a half years of crisis, you’ll see that we have been able to come out of it without producing much poverty – our unemployment has even dropped while the USA has seen the opposite trend.

The reason for this, of course, is that we don’t have the “hire and fire”-system that is prevalent on the other side of the Atlantic. Many employees were able to keep their jobs because they agreed to work less hours – we call this Kurzarbeit.

Overall, it’s a system that mitigates the dire consequences of an economic crisis and makes sure that the disparity between the fully employed, the less employed and and the unemployed is far less accentuated than you are used to. You might call it less flexible – and in some ways it actually is – but it also makes sure that companies have a trained work force at their disposal as soon as the tide begins to turn.

Besides, a society is more than a pool of people for companies to use at their will. We all share a responsibility for all of our ongoing well-being.

This might be true for the people you know, but it’s definitely not true in my experience. All of the people I know, who have gone to a university, are nowadays working either in their field or in one that was only accessible thanks to a higher education.

And though I have financed my education partly with years in the military and work during my college years, I have no doubt profited a lot from the investments of the previous taxpayer generation. But given the taxes I pay, I think, the ROI is substantial.

Yeah, I’m not seeing the fact that German average unemployment is up a few points over the American average a major mark against Germany, here (though it’s been consistently falling since 2005). When was the last time the US absorbed a near third-world country the same size as itself? The fact that unemployment rates are competitive with other Western industrialised nations just twenty years after reunification is a minor miracle, IMO.

Outsourcing Made in Germany – DW – 07/22/2004 This article suggests German corporations are threatening workers with offshoring to get salary concessions.
It also says the universiality of English as opposed to German makes it easier to send work abroad. Training Indian call operators to speak German would be a big problem. It might be fun for the Germans to hear them try though.
The German government labels offshoring as anti-German. We don’t dare call American offshoring un American. it is just good business.

There are plenty of politicians, including, Obama who rail against offshoring. They’re idiots. If US companies don’t take advantage of cheaper labor overseas, some other country’s companies are going to do so and then export to the US. Some other country like Germany. Or the Chinese will just do it themselves.

Actually, I was thinking of the opinions expressed on this board. Everyone I know IRL also works in a professional field.

Clearly the economies of the USA and Germany are different so there can’t be an apples to apples comparison.

It also seems to me that by absorbing East Germany, you effectively gained access to the equivalent of a low-wage third-world work force. Is that the case?

To cut a loooong story short: although the eastern states of the unified Germany experienced almost a complete de-industrialization during the 90s and, consequently, massive unemployment, the wages started to go up almost immediately – although they still haven’t climbed to the western states’ standard in the majority of cases twenty years later.

But there was no way to freeze them anywhere near a third-world level. Let me just name four reasons:
A) The working population could simply migrate to the western states – and 2 million, in fact, did so in the first year of the reunification.
B) The cost of living increased considerably in the East, even though the government intervened quite a lot to slow down the rising prices for rents, insurances etc.
C) The unions negotiated better wages when the opportunity presented itself, which, of course, is their job (and since many Americans are very wary when unions are mentioned: they played an important role in a peaceful and surprisingly smooth adaptation process and they didn’t overdue it, mostly).
D) It’d have been stupid to freeze the wages below welfare – that would have been the wrong incentive.

Btw, despite popular belief, the wages in Germany are not the main reason for the high labour costs - and our unions are not greedy. At least, they are less greedy than other parts of the population who have an easier time to get their hand in the cookie jar. The wages have indeed shrunk in the last decade - in contrast to almost every other western nation.

You never have to worry about your trade balance if you can export to the elites of the world. From what I hear, unemployment is WAY down this year, so much that they are discussing the possibility of loosening up the immigration laws to allow more foreign young workers in. My source for these statements is watching TV newscasts online, from ZDF or NDR, and from listening to Deutschlandfunk on my smart phone.

Their stable population is also a big help; unlike the U.S. they don’t need to create hundreds of thousands of new jobs every year just to keep up. Though just yesterday I heard about an uptick in births.

For every dollar purchased on the foreign exchange market, there must be a dollar sold. Foreigners buy US dollars in order to buy a) US goods and b) US bonds, stocks and real estate. So the goods market is linked to the asset market: and moreover the international capital markets are linked to the balance of trade in goods.

To the extent that the US de-industrialized in the 1980s, it was due to an appreciating dollar which made our goods less competitive abroad. That in turn was due to our low national savings: foreigners bought our assets (govt bonds, US stocks) and in exchange sold us goods. If foreigners sell more goods to the US than we export, that’s a trade deficit.

US national savings could have been boosted if individuals spent less of their paychecks during good times (the economics are different during recession) or if the US government ran a lower budget deficit. Budget deficits require the Federal Govt to borrow money on the bond market, which tends to either crowd out investment or drive up interest rates sufficiently to attract foreign capital. (Again though, the process works differently during recession. )

Germany’s trade surpluses are linked to their high national savings. Then again, I could imagine them maintaining robust domestic industry even if their savings were lower – but they would import commensurately more iPads and the like.

This may be generally true, but one reason for American firms losing their dominance in CNC was that they focused on the high-profit, high-dollar sectors, while German and Japanese firms went after low cost markets.