Made in Germany: The Business Magazine

Our guest this week is Michael Burda from Humboldt University (labor market expert)DW-TV: Mr. Burda, are German companies beginning to do what the state has failed to accomplish, that is create a pool of skilled workers? Michael Burda: Well, German industry has always been involved in education. The system in Germany involving apprenticeships has always had active financial participation of companies. DW-TV: But the state has always been behind that as well. Michael Burda: And the states have been behind that as well. It's a very Germanic, corporatist approach to educating. And it's obvious that industries can see right away where the shoe doesn't fit, where it's time to train more people. DW-TV: But they have been investing lots of money, like creating their own schools, as we saw in that story. Can companies afford to do that? These are huge outlays. Michael Burda: Absolutely, but that just shows how much these people are worth to companies. So having really well-trained workers in the next ten years is going to be an issue for a lot of industries, a lot of sectors, and I think it's very forward looking of German industry to start active participation in that. DW-TV: You know, this week we've heard US President Obama saying education is his top priority now to get the economy going again. Germany is in a much better place economically right now, but has the state, has the government here been neglecting education? Is that what we're seeing now, when companies step in and tried to create their own skilled workers? Michael Burda: Well, there is a lack of spending and active government participation in the university sector, I think. In the OECD league tables, Germany doesn't come off too well but the counter argument is they spend a lot of money on the apprenticeship system, so if you want to become a nurse you don't go to a college like you would in the United States. DW-TV: Right, this shortage, I guess, we've been talking about a shortage of skilled workers, that also shows that Germany's failing to attract foreign specialists. Again, the UK, the US are doing what it seems like Germany should have been doing all along. Michael Burda: There's a problem here and the Germans don't like the idea of discriminating in favor of people who have training, which Canada and Australia have been doing for decades. DW-TV: Maybe they should. Michael Burda: Absolutely. You see it happening already, I mean the fact that I got a job in Germany is because the Germans were willing to give me a long-term visa. I came here 17 years ago. DW-TV: You're an American. Michael Burda: I'm an American. DW-TV: We have to make sure folks know that. Michael Burda: It's always possible to make exceptions but you have to make lots of exceptions. DW-TV: What about freelance doctors and nurses? Is this about a labor force that needs more flexibility? Is that the story here? Michael Burda: The demand for flexibility is there. The hospitals want it. In America it might be easier to lay off doctors and nurses if things get tough. In Germany it's very difficult because of job protection laws. DW-TV: Which makes a hospital more reluctant to hire a doctor. Michael Burda: Exactly. So you have the negative reaction at the beginning. So hospitals are interested in this flexible buffer stock of doctors and nurses who can jump in. DW-TV: I mean, the German economy...we can't really complain about things right now. We've got a graph we want to show folks about unemployment: Germany compared to the rest of the euro zone, and you can see Spain: unemployment now around 20 percent, France coming in at 10 percent. France is pretty on par with the United States and then we have Germany and the Netherlands. Nice numbers there, considering what the rest of Europe is dealing with. How do you explain Germany's good fortune? Michael Burda: Germany went through a wrenching set of changes in the early 2000 decade and the fruits of those reforms are finally coming to be seen and Germany's also done very well trying to give money to companies to prevent them from laying off workers. They call it 'Kurzarbeit', short-time working. And that has tided....think of a tsunami hitting these companies. The tsunami has gone, the water has gone. If you can survive that, you're going to be OK. DW-TV: Is it correct to say that in the future the German labor market is going to have more people doing freelance work; we're going to have fewer people tied to a company but also fewer people with jobs that have benefits? Michael Burda: I think it's a foregone conclusion. I think it's a necessary part of any labor market to have this flexible margin. The most important question is whether the Germans want to accept it. Interview: Brent Goff