[Factories Are Aging] The Secret of Germany, a Manufacturing Powerhouse... "95% Matching Rate for Vocational High School Students"

Work-Study Parallel System Managed by the State
Support for Students with Learning Difficulties
"Small Wage Gap Between Large Corporations and SMEs"
Domestic Employment Rate Halved in 3 Years

[Asia Economy Reporter Junhyung Lee] "In Germany, around 600,000 vocational high school students find employment in manufacturing companies every year. Labor, management, and government regularly come together to create industry-academia linked jobs."

Kim Kiseon, a research fellow at the Korea Labor Institute, cited Germany’s systematic vocational high school system as the secret to its success in job creation in the manufacturing powerhouse. Having consistently studied the German labor market and employment policies, including the 2018 report "In-depth Study of Youth Labor Market and Employment Policy Overseas Cases: Germany," Kim explained, "In Germany, there is little difference in working conditions between large corporations and small and medium-sized enterprises, so worker mobility is low," adding, "Skilled workers do not leave, and labor market dualization does not deepen."

German vocational high school students receive education by alternating between school and manufacturing companies through the "dual training system" from the time they enter school. Germany manages and promotes this program at the national level through the Federal Employment Agency, which is equivalent to Korea’s Ministry of Employment and Labor. Once a year, labor, management, and government jointly discuss the program’s direction and compile a list of companies participating in industry-academia cooperation.

The results are encouraging. The matching rate between German vocational high school students who do not drop out and participating companies reaches 90-95%. This means that there is virtually no job mismatch for students who graduate normally from vocational high schools. Germany’s success is also attributed to social and cultural backgrounds. Unlike Korea, where unions are organized by company, Germany has industry-wide unions, so wage gaps according to company size within manufacturing are not significant.

Another background is the sense of community among German companies. The guild culture, which is the current concept of cooperatives, developed in the Middle Ages and shares the awareness that "we must nurture the next generation." Kim said, "German companies approach vocational high school student education from a mid- to long-term perspective rather than short-term cost-benefit," adding, "They invest in potential even if productivity is not immediately high."

The government’s commitment to "take responsibility until the last person" also played a role. Kim explained, "Germany has an institutional foundation that supports vocational high school students with weaker learning abilities to work at appropriate companies," adding, "The characteristic of the German labor market is that if students have the will to graduate properly, they have opportunities to be matched with companies."

Although Korea also has a dual training system, the employment rate of vocational high school graduates has halved in the past three years. According to the Education Statistics Yearbook, the employment rate rose to 50.6% in 2017 but dropped to 27.7% last year. Meanwhile, the rate of continuing education increased from 32.5% in 2017 to 42.5% last year. These figures undermine the original purpose of vocational high schools such as specialized high schools and Meister high schools, which is to nurture high school graduates as skilled talent.

Bae Hoyoung, a research fellow at the Small and Medium Business Institute, said, "Basically, many students attend vocational high schools with college entrance in mind," adding, "This is a result comprehensively reflecting social perceptions and wage gaps." Bae also noted, "The labor market centered on industry-wide unions is related to historical contexts and is difficult to imitate blindly," but added, "However, clues to solving the youth workforce shortage in small and medium manufacturing can be found in Germany’s solid vocational high school system."