This common phrase meaning advancement through technology has always been used as a slogan for the German automotive industry but often as an indicator of the general strength of the German economy within the Eurozone.
Therefore, it’s slightly surprising to see figures indicating that there has been a slight increase in the level of unemployment in Germany. A recent report on BBC News Business highlighted that the number of people out of work in Germany unexpectedly rose by a seasonally adjusted figure of 25,000 in September to just under 3,000,000. The explanation given by the Federal Labour Office (FLO) is that there has been a cut in the number of government job schemes and labour market policies are now providing less relief to employers in taking on new workers.
Does this suggest that the labour relations model based on collective consultation, training and the creation of mini jobs is under threat? We would suggest not.
The FLO went on to explain that the recent hike is because it is now seeking to adopt longer term policies in attempting to train the unemployed. Therefore the short term pain of increased unemployment may generate medium/long term gain. German Employer Federations have always been sensitive to the need to equip their younger workers and indeed older workers with modern skills to suit the needs of current and emerging markets.
The decision to now focus on long term training rather than short term initiatives could be a very positive step. It is interesting to note that a recent government review of the labour market model in the Netherlands came to a very similar conclusion. There is general concern across Europe about the creation of too many short term jobs. Although this can often be attractive, particularly in the UK economy, it would seem that our continental neighbours are placing greater efforts on long term training solutions to the problem of structural unemployment.
Commentators suggest that unemployment will fall very slowly under the Euro Zone or at least will be stable. It will be interesting to see whether EU member states tweak labour relation models in the coming 6 to 12 month period to try and increase greater flexibility in the labour market, or whether they will attempt to adopt strategies similar to the German economy whereby they are looking to try and solve long term often systemic problems.