Learning a Lesson from Germany
Germany has an aggressive industrial retraining system functioning, unlike the U.S.
In A German Initiative to Keep Workers Employed by Retraining Them, Melissa Eddy details at length how committed Germany is in retraining workers. In 2021, 70 German companies formed Alliance for Opportunity in 2021, to retrain workers in a shifting economy that relies heavily on certifications to get jobs. The companies include Mercedes-Benz, and a who's who of Germany companies.
She writes:
Germany has fallen behind its peers in automating manufacturing, and as its industry moves to keep pace, the country is facing thousands of job cuts in its automotive and engineering sectors even as more than 700,000 positions across all industries remain unfilled.
Unstated is the fact that German car and truck manufacturers have shifted tens or hundreds of thousands of job overseas to the U.S. and other countries where pay and benefits are lower. In the U.S. South, in particular, car and truck factories have long been ununionized, although that is changing (see The Rise, Fall, and Rise of U.S. Auto Unions).
Despite cuts in many fields last year, the government earmarked more than 3 billion euros, or $3.23 billion, for companies to offer training programs and certification courses for employees facing the loss of their jobs.
The courses are held during working hours and scheduled to fit with participants’ shifts. Workers continue to earn their salary while they are in classes, which are compressed into several months, instead of the standard three years.
Contrast this with the chaos left behind in Lordstown when GM shut down it's operations there. In Remember Lordstown I wrote:
This is the era we are in. Manufacturing is up in the US, but automation means fewer workers are required, and then older plants like Lordstown are shut down, and thousands are out of well-paying jobs. And please don't start talking about retraining. The historical record on [U.S] retraining is terrible. See Amy Goldstein's Janesville about what happened to that town when the GM plant there closed (see Jennifer Senior, In ‘Janesville,’ When the G.M Plant Closed, Havoc Followed). Goldstein researched the failure of retraining, as Jennifer Senior recounts:
Readers will also finish “Janesville” with an extremely sobering takeaway: There’s scant evidence that job retraining, possibly the sole item on the menu of policy options upon which Democrats and Republicans can agree, is at all effective.
In the case of the many laid-off workers in the Janesville area, the outcomes are decidedly worse for those who have attended the local technical college to learn a new trade. (Goldstein arrives at this conclusion, outlined in detail, by enlisting the help of local labor economists and poring over multiple data sets.) A striking number of dislocated G.M. employees don’t even know how to use a computer when they first show up for classes at Blackhawk Technical College. “Some students dropped out as soon as they found out that their instructors would not accept course papers written out longhand,” Goldstein writes.
It makes you realize how challenging — and humiliating — it can be to reinvent oneself in midlife. To do so requires a kind of bravery for which no one gets a medal.
Note that I had to insert ‘[U.S.]’ in the quote above, because the Germans seem to have it worked out. In Germany, years before the plant is going to be decommissioned they start retraining the workers, paying them while being trained and scheduling their work shifts around the training. They gain certification, and make a relatively easy transition to new employment.
But here, in the U.S., you are on your own.
The U.S. should be developing something like the Alliance for Opportunity, here, for U.S. workers, and underwriting similar on-the-job training, learning a lesson from Germany.