Germany′s Labor Market Losers | Business| Economy and finance news from a German perspective | DW | 09.03.2005
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Germany's Labor Market Losers

A new study shows that German companies are fixated on youth and reluctant to hire employees over 50. Even those over 45 who find themselves jobless often have to accept that their working lives have come to an end.


Older workers are almost a rarity in Germany, but that could change

Although he has some 20 years work as a plumber on large commercial buildings behind him, 47-year-old Andreas Dienelt is installing curtain rods and hooking up washing machines in private apartments these days. He makes about €10 ($13.40)an hour doing this occasional under-the-table work, which helps supplement the unemployment benefits he receives from the state.

After his firm laid him off in 2002, Dienelt entered into a program to retrain as a facility manager. But he still hasn't found work and, at this point, isn't very optimistic he ever will.

"My age is working against me, I'm sure of that," he said. "No one wants to hire you after you've passed 40."

Fear of gray

Dienelt's opinion is backed up by a study conducted this month by the Institute of Work and Technology (IAT), based in the city of Gelsenkirchen. The institute found that only 54 percent companies they asked were willing to employee people over the age of 50.

Just under one-third said they would hire an older worker only if the state paid them some sort of allowance for doing so. Fifteen percent of those surveyed said "as a basic principle" they would not offer jobs to applicants over the half-century mark.

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"There are prejudices that exist in many personnel departments in Germany," said Wilhelm Adamy, head of the labor policy department at the German Federation of Trade Unions (DGB). "On the one hand, they think that people over 45 or 50 won't be effective employees or that they won't be able to come to grips with new technologies."

The result of those prejudices is a high rate of unemployment among Germany's older, but still working-age population. Every fourth unemployed individual in Germany is over 50. Only around 38 percent of German citizens between the ages of 55 and 64 are employed, much lower than the average in industrialized countries, which is around 50 percent. Germany's northern neighbor Denmark manages to keep 57 percent of its over-50 population employed, and Sweden can boast that 68 percent of its 50-plus group is working.

But in Germany, with an unemployment rate topping 12 percent and jobless levels reaching 20.5 percent in the eastern part of the country, employers can pick and choose who they want to hire. They generally reach for the fresh face and steer clear of the wrinkles.

"They want a team which is ready for the Olympics, so to speak. They're afraid of older workers being sick and out a lot," said Adamy.

Early retirement

He and several other experts blame part of the problem on the German government's long-standing policy of subsidizing early retirement schemes, which had the effect of pushing older workers out of the job market when they were in their 50s. They were often replaced by younger workers who earned less, and thereby helped keep company personnel costs down.

But the result of that strategy has been to put enormous pressure on Germany's already struggling social welfare system, since the government was paying for the lion's share of early retirement packages, not the companies where the retirees had been employed. As of 2006, the government will end this subsidy, which will mean those employed will likely stay on the job until the retirement age, currently at 65, but that is a number which is likely to rise in the future.

Forced to change

Although the labor pool now allows companies to indulge in their Dorian Gray proclivities and keep their staffs forever young, demographic changes could mean the blush of youth will soon fade.

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Germany is a graying society and the number of older, retired individuals will soon outpace the number youngsters entering the work force. Demographers say from 2015, the number of employment-aged people will begin to drop off strongly.

"From about 2020 or 2025, we are cautiously optimistic that older people will have an easier time finding work because the younger people won't be there anymore," said Bernd Katzenstein, a spokesperson for the DIA, an organization which studies trends in old age provision, such as pensions, in Germany. Companies will, in effect, be forced to take on older workers.

"Our most recent study [on working and age] concluded with the call to companies saying 'Get ready for this, because it's coming.' But little has been done so far," he said.

A few companies have begun thinking about the future, according to him. Big names like Siemens and DaimlerChrysler have begun looking at ways to manage an increasingly older work force with considerations about preventive health care, part-time work and continuing education programs.

The DGB's Adamy added that a few companies are realizing that hiring older people can even be advantageous, for example in some retail branches, where older salespeople can create an atmosphere of trust with customers that a pierced and tattooed twenty-something might not.

But those companies are in the minority.

"Right now it's catastrophic for older people," said Katzenstein. "All we can say is that down the road, there will be a new dawn for them."

But that's cold comfort, since by that time, many will have already ridden off into the sunset.

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