How Germany Keeps Kids From Dropping Out

It may be hard for Americans to fathom a world in which corporations, instead of merely lamenting the shortage of skilled labor, volunteer to train vast numbers of the non-college-bound. Oh, yeah, and to pay them a bundle along the way. But under Germany's earn-while-you-learn system, companies are paying 1.6 million young adults to train for about 350 types of jobs, ranging from industrial mechanic to baker to fitness trainer. And the trainees' average annual salary of $19,913 helps explain why less than 9% of Germans drop out of high school: they can't get in on the action without a diploma.

Private-sector apprenticeships have long been a mainstay of Germany's robust vocational-education program — so much so that in 2004, 58% of students finished high school with three-year training contracts in hand. Historically, more than two-thirds of the trainees end up with permanent job offers by the time those contracts are up. And despite increasing pressure from globalization and a shrinking labor market at home, 23% of all German companies continue to offer apprenticeships, a remarkable statistic, given that it takes into account every one-man shop as well as every megacorporation.

Even more impressive: businesses don't get tax breaks or other subsidies to help foot the bill. All the German government pays for is the two days a week apprentices spend in vocational school. So what's in it for the companies? According to a recent survey, 90% of the firms that offer apprenticeships say they do so because skilled employees simply are not available on the job market.

That's why the German model has occasionally been exported, if only on a local basis, to nations that also suffer shortages of trained workers. For instance, when BMW decided ten years ago to open a factory in central England, the enginemaker struck a deal with the British government to jointly finance a German-style apprenticeship program. Likewise, in 1995 a small consortium of manufacturing companies in North Carolina — that now includes firms headquartered in Germany, Switzerland and Austria — approached high schools and community colleges in the Charlotte area to develop Apprenticeship 2000, a four-year program for students interested in technical careers. The participants, who are recruited as 11th-graders and must maintain a 2.5 grade-point average, get paid to attend community college and, upon completing the apprenticeship, are guaranteed a job offer but are not obligated to accept it. Starting salaries are generally between $34,000 and $40,000.

Curiously enough, while the financing, training facilities and guaranteed benefits are all at hand in the North Carolina experiment, the students are not. One reason may be that the closing of several manufacturing plants in the state has scared off potential recruits who often turn to the service sector and never even get the chance to learn about the consortium. The largest of its member firms, Julius Blum Inc., an Austrian-based maker of hinge, drawer and rollout systems for cabinetry, has already invested some $30 million in machinery for the training program and hired 26 of its graduates. But Blum apprentice trainer Tony Austin says the company still faces an uphill battle educating students, parents and — yes — school counselors about the value of apprenticing. Says Austin: "Recruiting is one of our biggest problems."

—Reported by Constance E. Richards/Asheville and Regine Wosnitza/Berlin