BIBB REPORT Edition 14/10

Money plays a role!

Are trainees satisfied with their pay?

Ursula Beicht, Andreas Krewerth

The opportunity to earn "some money of their own" whilst training represents a particular benefit of the dual system of vocational education and training for young people. However, training allowances paid vary widely and many trainees do not currently earn enough to cover their living costs. More than one in four are prepared to take on the stresses and strains of a part-time job. Some do this to finance their basic living needs, some to fulfil additional desires. Trainee satisfaction with their training allowance does not depend solely on the absolute amount paid. The scope of productive work to be carried out within the company, for example, is also a relevant factor. These findings emerge from a survey of around 6,000 trainees carried out by the Federal Institute for Vocational Education and Training as part of the research project "Vocational Training from the Trainees' Point of View".

Significance of training allowances for the trainees

Almost two thirds (71%) of the trainees surveyed by BIBB considered that it was "very important" or "important" to earn "a lot of money" whilst still undergoing training. This shows that training allowances are of great relevance to trainees. From the perspective of the trainees, various developments in dual training could be cited as a reason for these high expectations with regard to allowances.

• The shortage of training places, a situation which has prevailed for some considerable time and reached a pinnacle over the past ten years, has led to significantly longer transitional processes from general schooling to vocational education and training. This circumstance is also reflected in the increased age of trainees. In 1993 more than half (52.5%) of those with a newly concluded training contract were under eighteen years of age, whereas in 2007 this was only true of just under a third (31.3%) of new trainees. During this period, the average age of apprenticeship entry rose from 18.5 to 19.4 years. This higher age is associated with rising consumer wishes as well as bringing about a constant increase in the proportion of trainees who move out of the parental home (HAMMES/RÜBENACH 2009).
  
• In the light of the scarcity of training places and regional imbalances on the training market¹, today's school leavers need to display a willingness to be regionally mobile in order to secure a training place of their choice or even to find a training place at all. The 2008 survey of applicants conducted by the Federal Employment Agency (BA) and the Federal Institute for Vocational Education and Training (BIBB) showed that a fifth (21%) of all training place applicants registered with the BA in the business year 2007/08 applied for training places located more than 100 km from their home. A total of 12% of the young people entering in-company training have relocated when commencing training and 23% commute more than 20 km per day (BEICHT/EBERHARD 2009). Regional mobility frequently results in high removal costs and considerable expenses for running a home and car or for bus and rail tickets. These costs are often met by the trainees themselves or by their parents.
  
• Significant changes in the way in which in-company training is structured have taken place in the last few years. The most recent BIBB survey on the costs and benefits of vocational education and training, for example, shows a considerable increase in the productive deployment of trainees. Whereas the average annual monetary value of productive performance was €7,730 in the year 2000, this had risen to €11,692 by 2007 - a nominal increase of around 50%.²Alongside the increases in wages, the main reason for this is the much greater degree to which trainees are integrated into company business processes (WENZELMANN et al. 2009).

Before moving on to a presentation of the current training allowance situation and a consideration of the extent to which today's trainees are satisfied with their allowances - including in the light of the developments in dual training outlined above - we should begin by taking a brief look at the history of training allowance payments and the current general legal conditions by which they are governed.

Historical development of training allowance payments

In the past, trainees did not always receive training allowances as a matter of course. In Medieval times, the opposite case even applied. Apprentices were required to pay a premium to the master craftsman providing training. Although the payment of apprenticeship premiums gradually disappeared from the craft trades, it was not until the 20th century that apprentices were increasingly granted a so-called educational allowance. As industrialisation took hold, more and more young people went directly into a wage-paying job rather than entering training in a craft trade. From the end of the 19th century, the requirement for well trained skilled workers grew considerably and industrial apprenticeship training was accorded increasing significance. By now, the trade unions were well established. Since they regarded any training contract as a contract of employment and training allowances as wages, they began to call for collective wage agreements to cover this area. For their part, the chambers of crafts and trades and guilds responsible for training in the craft trades also claimed the right to stipulate apprentice allowances in their sector. They viewed such an allowance as a form of financial assistance to support apprentices in meeting their livings costs rather than as a wage. For this reason, collective wage agreements initially tended to be largely confined to the field of trade and industry.³

Following the establishment of the concept of craft trades during the National Socialist era and the stipulation of standardised training grants for all apprentices, regulatory authority for training allowances initially remained unclear in the Federal Republic of Germany after the war. The conflict between the trade unions and the craft trades reignited. On many occasions, courts and legal experts wrestled with the disputed issue of whether the chambers of crafts and trades had the right to set binding training allowances. A considerable period of time elapsed before clarity could be achieved.⁴ Whereas apprenticeship allowances in the field of trade and industry were increasing subject to collective wage agreements as early as the 1950's, the chambers mostly continued to set remuneration levels or issue recommendations in the craft trades sector until the end of the 1960's. Collective wage agreements to cover training allowances did not become usual practice in craft trades until during the 1970's.

The first comprehensive regulation of in-company vocational education and training in the Federal Republic of Germany came in 1969 in the form of the Vocational Training Act (BBiG). The right to receive a training allowance was established in law in the following terms. "Training employers shall pay trainees an appropriate allowance. It shall be so assessed in accordance with the trainees' age that it increases at least once a year as the initial training progresses."⁵ The reason stated within the legislative procedure for the obligation to pay a training allowance is that such an allowance should secure financial support for the trainee (or his or her parents) during vocational education and training as well as constituting justifiable remuneration for work performance (GERMAN BUNDESTAG 1969). The reasons given why training allowances should increase on at least a yearly basis are that the economic requirements of trainees rise as they become older and that the work performance provided by trainees becomes more valuable for the company as training progresses. Training allowances were thus accorded the dual function of providing assistance with meeting living costs and giving remuneration for work done. Training allowances should be appropriate with regard to these criteria. As far as the precise amount of training allowances was concerned, the legislators decided that the two sides of industry or the contracted training partners should act autonomously in setting levels paid, although due consideration was to be accorded to the principle of appropriateness at all times.⁶

Current legal framework governing training allowance payments

Training allowance payments within today's dual system of vocational education and training vary considerably. Although training allowances are now subject to collective wage agreements in virtually all significant branches of trade and industry - whereby standardised remuneration rates which increase for each training year usually apply to all trainees within the respective collective wage agreement sector ⁷ - extremely wide differences in the level of allowances have emerged between the sectors. In addition to this, there are often regional deviations within the individual branches of trade and industry, particularly between West and East Germany. Further differences result from the fact that training allowances based on collective wage agreements only constitute binding minimum amounts for companies covered by collective bargaining.⁸ They do not apply to companies not covered by collective bargaining. A further aspect is the fact that no collective wage agreements as yet exist within individual craft trade sectors in particular (e.g. dental technicians) and in the liberal professions (e.g. lawyers' practices). For this reason, the remunerations paid in such sectors are mostly relatively low. This often gives rise to the question as to how low a level of remuneration can actually be in order still to be viewed as "appropriate" within the meaning of the BBiG.

This issue has formed the object of many a case which the administrative and employment courts have had to hear (GEDON/HURLEBAUS 2009, HERKERT/TÖLTL 2009, SCHIECKEL/OESTREICHER/ DECKER 2009). Over the course of time, the following legal view has become established. A remuneration is deemed to be appropriate if it provides discernable support for the living costs of the trainee as well as constituting a minimum remuneration for the work performance of the trainee within the respective branch of trade and industry. The assumption is that the two sides of industry always accord sufficient consideration to these appropriateness criteria. For this reason, training allowances which have been agreed within the context of a collective wage agreement are always viewed as being appropriate for their scope of application. Because companies not covered by collective bargaining cannot be obliged to pay a wage forming the object of a collective wage agreement, however, such companies may pay training allowances which are up to 20% below the remuneration agreed within the scope of collective wage agreements for their branch and region.⁹ If no collective wage agreement exists for a branch, the legislation permits the  collective bargaining agreement of a related sector or the recommendations of professional associations, chambers or guilds to be used as a guide where necessary, although account must be taken at all times of the directive to pay appropriate remuneration.

In the case of extra-company training contracts financed by public funds within the framework of state programmes or on a statutory basis, the amount of training allowance payable is set by the state and is usually considerably less than the rates payable under collective wage agreements. This particularly affects extra-company training for young people with learning difficulties, socially disadvantaged young people or young people with disabilities funded pursuant to German Social Security Code (SGB) II and III (§ 242 SGBIII or § 102 SGB III), training financed within the scope of the Federal Government-Federal States Programmes for East Germany and the (supplementary) federal state funded training programmes for so-called "market disadvantaged" young people. The Federal Employment Court justified the admissibility of lower training allowances by pointing to the limited public funds available, arguing that if remunerations paid were below the level of those paid in accordance with collective wage agreements it would be possible to finance training for a greater number of young people.

There is no upper limit stipulated for the remunerations paid. Every company, whether covered by collective bargaining or not, is at liberty to pay training allowances above the levels set within the collective wage agreements. The line here, however, is likely to be drawn at the point where the amount of remuneration paid gives rise to the supposition that an employment contract is in place rather than a training contract. 

In legal terms, a training allowance constitutes work remuneration from employment subject to compulsory social insurance contribution (§ 5 Social Security Code V). For this reason, trainees are required to pay statutory social insurance contributions if the training allowance paid exceeds the threshold for low earners (currently €325). Below this level, the company is required to assume responsibility for all social insurance contributions payable, both the employer and employee contributions. Trainees are also required to pay income tax if their allowances exceed the taxable income threshold.

If a net training allowance is insufficient to cover living costs and training needs, the Federal Employment Agency (BA) may in certain circumstances provide a vocational training support grant pursuant to § 59 SGB III. This applies if the trainee is over the age of eighteen, if the trainee no longer lives in the same household as his or her parents and if neither he/she nor his or her partner or parents is in possession of the necessary funds. If a training support grant is provided, the overall monthly needs of the trainee are determined. These needs comprise basic requirements (currently €341), rent requirements including ancillary costs (€146, may be increased to a maximum of €218), a flat-rate sum for work clothing (€12) and individually calculated allowances for travel expenses and other costs. Trainees receive a training support grant for the proportion of their overall needs which they are unable to meet themselves. This guarantees that financial security of training can be established at a minimum level even if the amount of training allowance received is low.

Taking as its basis the BIBB survey of around 6,000 trainees, the following will present and analyse the current levels of net training allowances, how trainees judge their remuneration situation and the factors upon which their satisfaction with their allowance depends.

Methodological information on the trainee survey

During the first half of 2008, a classroom based survey involving around 6,000 trainees from 205 vocational schools in West and East Germany was conducted as part of the BIBB research project "Training from the Trainees' Point of View" (Beicht et al. 2009). The study represented the diversity of the prevailing training conditions within the dual system by encompassing 15 training occupations with large numbers of trainees. Both in-company and extra-company training arrangements were included. All those surveyed were in their second year of training.

The survey took place in four West German federal states and two East German federal states (Baden-Württemberg, Brandenburg, Hamburg, Hessen, North Rhine-Westphalia, Thuringia). These federal states were selected on the basis of economic and social structure criteria and reflect Germany's regional diversity. Within the individual federal states, a random procedure was used to choose the vocational schools and classes to be surveyed. The results of the survey are representative of second year trainees in the six participating federal states part undergoing training in the 15 training occupations forming the object of investigation.

The survey was carried out by the Institute for Applied Social Research (infas). Trainees were given a written questionnaire to be completed within one lesson at vocational school.

On average, the second year trainees within the 15 occupations¹⁰ surveyed have a monthly net training allowance (i.e. after deduction of any social insurance contributions and income tax payable) of €466. The average level of allowances in the federal states of West Germany is €478, more than a third (35%) higher than in the federal states of East Germany, where the corresponding average is €353. According to the calculation method used for the training support grant, the financial requirements of a trainee not living with his or her parents are estimated to be at least around €500 (not including additional needs for rent costs and travel expenses). The average amount of remuneration paid thus does not fully cover these requirements either in West Germany or in East Germany.

Trainees who have concluded their training contracts with an extra-company institution rather than with a "normal" company receive particularly low levels of training allowance. This is true for 8% of trainees in the 15 occupations and generally involves an extra-company training arrangement which has been publicly funded. Average remuneration here is €326, almost a third less (32%) than for in-company training (€478).

As Figure 1 shows, there are strong variations between net training allowances. 62% of trainees receive less than €500 a month. One in ten receives €300 or under. Only 14% of trainees are paid relatively high amounts of more than €600.

 

Allowances of €300 or less are particularly widespread in the federal states of the former East Germany, where 46% of trainees are paid at such levels. This is due to the fact that training allowances paid in accordance with collective wage agreements remained 14% below the level in the West in 2008 (BIBB 2009)¹¹ , the significantly lower level of collective bargaining coverage on the part of East German companies being a further cause (KOHAUT/ELLGUTH 2008). The very low training allowances paid for extra-company training, an arrangement which is considerably more prevalent in East Germany than in West Germany,¹² is also clearly reflected in the remuneration structure.

Male trainees in the 15 occupations included in the survey receive training allowances which are approximately 5% higher than those of their female counterparts, the average figures being €477 and €452 respectively. This somewhat lower level of remuneration for young women applies both to in-company training (men: €487 €, women: €466) and to extra-company training (men: €334, women: €318). The main reason for these differences is the fact that young women are concentrated in occupations which are strongly female dominated and in which training allowances paid are very low (BEICHT 2010).

Average remuneration for trainees from a migrant background ^13, who make up a proportion of 22% in the 15 occupations, is €456. This represents only a relatively narrow deviation of 3% compared to trainees not from a migrant background. Notwithstanding this, the fact that trainees from a migrant background tend to be uncommon in East Germany makes a comparison restricted to West Germany more appropriate. This reveals a somewhat larger deviation of 6%, the average allowances for migrants and non-migrants being €456 and €486 respectively. Young people from a migrant background undergoing in-company training receive 4% less (€469 as opposed to €491). This is mainly because they more frequently enter training in occupations where the training allowance is lower. Virtually no difference in remuneration exists in extra-company training (€353 compared to €357). Nevertheless, 12% of trainees from a migrant background in West Germany are in (lower paid) extra-company training compared to only just under 5% of trainees not from a migrant background.

The following deals exclusively with trainees who have concluded their training contract with a company. Extra-company training is no longer taken into account. Average net in-company training allowances in West Germany are €486, 27% above the average level paid in East Germany (€382).¹⁴ Nearly a third (31%) of East German trainees undergoing in-company training receive an allowance of €300 or less (cf. Figure 2).

No considerable differences based on company size are discernable. Trainees in the smallest companies (with up to 9 employees) receive an average of only €418, whereas those in large companies (500 employees and upwards) receive €593, or 42%, more. The main reasons for this are the widely differing levels of remuneration within the individual economic branches. In the trade and industry sector, where medium-sized and large companies prevail, significantly higher training allowances are paid than in the craft trades sector, the structure of which is dominated by small and medium-sized companies, or in the liberal professions (BIBB 2010). Alongside the considerable deviations in wages and salaries between the economic sectors, which exert a strong influence on the amount of training remunerations, the low degree of collective bargaining coverage of the smallest companies or the high level of such coverage found amongst large companies is also likely to be a major contributory factor towards the variations in training allowances.

Punctual payment of training allowances is of particular importance to trainees who need to finance their own accommodation from such remuneration. Although a statutory stipulation is in place which prescribes that training allowances must be paid on the last working day of the month at the latest (§ 18 Paragraph 2 BBiG), not all companies adhere to this. As many as 17% of trainees undergoing in-company training reported unpunctual payments. 8% said that this occurred sometimes, 9% even complained that this was often the case (cf. Figure 3).¹⁵ There are major differences in this regard according to the size of the company providing training. In the smallest companies (with up to 9 employees), over a quarter (26%) of trainees do not always receive their training allowance on time. For 14%, this is often the case. The proportion of trainees not receiving their remuneration in a timely manner decreases as the company size increases. Notwithstanding this, it is only in large companies (500 employees and upwards) where unpunctual payments of training allowances virtually cease to be a problem.

The issue of whether trainees perceive their training allowance to be appropriate is crucially determined by how highly they rate their own performance for the company. Trainees will view their work performance as particularly good and "valuable" if they often have the opportunity to carry out normal company work in the same way as their colleagues who have completed training and are able to perform these activities just as rapidly and just as well. As Figure 4 shows, almost four fifths of second year in-company trainees in the occupations surveyed are deployed to carry out tasks which they perceive they are able to complete just as well as a skilled worker in their company. The time scope of these activities, however, varies considerably. Whereas 15% of trainees estimate that a maximum of a quarter of their total in-company training time is taken up by such activities, 22% percent assume a proportion as high as three quarters. In terms of the overall average of all in-company trainees, also including those not deployed for such work activities, the proportion of in-company training time taken up by work of this nature is 43%.¹⁶

Trainees in West Germany assess the scope of work which they are able to perform just as well and just as rapidly as colleagues who have completed training somewhat more highly than their counterparts in the East. Results differentiated according to company size reveal that the smallest companies most frequently deploy trainees for activities which are the equivalent of those carried out by skilled workers. The proportion of such activities decreases as the size of the company increases. By far the lowest proportion of such work is found in large companies (500 employees and upwards). The perception of the trainees is, therefore, that they are less closely integrated into work processes in major companies. One possible reason here could be the fact that training more frequently takes place at a greater distance from the workplace, such as periods spent at in-company training workshops. Training is, however, also often very broadly based. This means that trainees gradually spend time in the various departments of the company and learn a wide range of task areas. This makes intensive productive work deployment more difficult.

The frequent deployment of trainees beyond the agreed in-company working time may also serve as an indicator of a high degree of work performance. In overall terms, significantly more than half of the trainees (59%) reported regular overtime at the company. The equivalent proportion in East Germany is somewhat lower (54%). Of these trainees, a total of just under a third (31%) performed up to two hours of overtime per week (cf. Figure 5). Over a quarter (26%) do more than five hours of overtime weekly. Even if a certain over-estimation may be involved in some cases, this data makes it clear that trainees are employed beyond normal company working hours to some considerable extent. The average number of hours of overtime performed by trainees who regularly work longer hours is 4.8 hours a week.

60% of these trainees are subsequently able to compensate for overtime worked by receiving time-off in lieu or by being paid separately for the overtime as statutorily prescribed (§ 17 Paragraph 3 BBiG). 17% of trainees, however, receive no time-off in lieu or special payment in some cases. 23% state that they never receive compensation for the overtime they have worked¹⁷ .This represents a clear breach of statutory provision on the part of the relevant companies delivering training.¹⁸ Large numbers of hours of overtime and an absence of compensation opportunities are particularly frequently recorded in the smallest companies (with fewer than 50 employees). By way of contrast, large companies (500 employees and upwards) require trainees to perform overtime on a significantly less frequent basis and compensation for overtime is virtually always provided.

To sum up, we may state that second year trainees are often already deployed by companies in the same way as a skilled worker for relatively large proportions of time and frequently perform overtime, without receiving compensation in some cases. How do the trainees now judge the amount of training allowance they receive taking into account both their work performance for the company and, by the same token, the expenses incurred by the company for the training they are given? As Figure 6 makes clear, more than two thirds of the trainees (67%) believe that the remuneration they receive is too low in overall terms. Just under a quarter (24%) perceive that the level of training allowance is about right. Only about one in ten (9%) believe that training remuneration is very good in the light of their own work performance and the training expenses incurred by the company.

Surprisingly, trainees in the federal states of West and East Germany evaluate the amount of training allowance received virtually equally, although the East German trainees earn significantly less. Possible explanations for the phenomenon will be explored below.

There are, by way of contrast, considerable differences in the evaluation of training allowances according to company size. More than four fifths (82%) of trainees in the smallest companies (up to 9 employees) evaluate their remuneration as too low in relation to their work performance and the training expenses incurred by the company. In large companies (500 employees and upwards), this is true for less than a third (31%). Whereas only 3% of trainees in the smallest companies judge their training allowance to be very good, the corresponding figure for large companies is as high as 28%.

Differences between occupations

The amount of the average net training allowances paid during the second year of training differs considerably between the 15 occupations forming the object of investigation. Top of the list are the training allowances of €612 paid to bank clerks, whereas those paid in the craft trade occupation of painting and varnishing are 46% lower at €333. In occupations where training (primarily) takes place in the trade and industry sector, trainees receive higher average training allowances than in the craft trades in virtually all instances (cf. Figure 7).

There are also considerable deviations in company work performance. Management assistants for retail services are by far the most likely to be deployed for activities which are the equivalent of those performed by their colleagues who have completed training and by far the most likely to have achieved equal mastery of such task. 65% of their whole in-company training time is taken up by such activities. The smallest proportions of such activities are to be found in the occupations of "industrial mechanic" (25%) and "mechatronics technician" (26%). The average number of hours of overtime regularly performed varies from 7.8 hours per week for trainee cooks to one hour in the case of industrial mechanics.

Differences in evaluation of the amount of training allowance are also extremely clear. The trainee medical assistants and hairdressers most frequently consider that their training allowances are too low (93% and 91% respectively). On the other hand, industrial mechanics are least likely to judge that their remuneration is insufficient (32%). In overall terms, a clear tendency towards a better evaluation of training allowances is discernable in occupations in which payments and the proportion of work which is the equivalent of the deployment of skilled workers are higher and the amount of overtime lower. By way of contrast, low amounts of training allowances in conjunction with a large number of hours of overtime result in a critical evaluation of the amount of remuneration paid.

Part-time jobs alongside training

The fact that many trainees are under the subjective perception that their training allowance is too low is not the only issue. In many cases, remuneration paid is, in purely arithmetical terms, insufficient to cover (minimum) living costs let alone fulfil any further material wishes the trainee may have. To this extent, it is unsurprising that a relatively large proportion of the trainees hold down a regular paid part-time job in addition to their training. In overall terms, this is true for over a quarter (27%) of second year trainees in the 15 occupations surveyed.

Despite the lower levels of remuneration, trainees in East Germany are somewhat less likely to pursue a part-time job than their counterparts in the West (cf. Figure 8). Although this is possibly due to a lack of jobs on the East German labour market, there may also be a connection with the more frequent drawing of state benefits which would be set off against any part-time earnings (SARDEI-BIERMANN/KANALAS 2006:74).

Clear differences are revealed depending on the sector in which training takes place. Whereas only 21% of trainees have a part-time job in occupations where training primarily takes place in the trade and industry sector, the corresponding figure for occupations mainly attributed to the craft trades sector is 37%. One explanation for this are that craft trade skills are probably easier to deploy in part-time jobs., although it is also likely that the lower levels of training allowances paid in craft trade occupations play a crucial role. Major differences with regard to the frequency with which part-time jobs are taken up are also to be found according to amount of training allowance. One third of trainees with remuneration under €400 have a part-time job, whereas the figure for those with a training allowance above €600 is only one in five.

Trainees in part-time employment work for an average of 9.2 hours per week in their second job, the equivalent of more than one additional working day. There is, however, considerable variation in the time scope of the part-time jobs. Although 38% work on a fairly limited scale for up to 5 hours a week, 15% spend more than 15 hours a week in their second job. In East Germany, the latter proportion applies to as many as 20% of trainees with a part-time job. Given such a high additional time commitment, it is highly probable that training will be negatively impacted by part-time employment and that, in the long term, health consequences may be expected to ensue due to the lack of sufficient periods of rest and recuperation.

In order to protect employees from overwork, legislation sets a maximum level for working time which is stipulated to be 48 hours per week (§ 3 Labour Act). For young people aged under 18, the maximum permissible working time is 40 hours per week (§ 8, Paragraph 1 Child Labour Protection Act). These provisions also apply to trainees. If trainees have a part-time job, the total periods of training (including vocational school teaching) and employment in the part-time job are not permitted to exceed the maximum limit. Trainees are required to notify the company providing training of any part-time jobs held, and the company is responsible for ensuring that maximum working time is not exceeded. Part-time jobs involving more than 15 hours of employment per week will normally cause the limit to be transgressed. Within the scope of the present study, it is not possible to judge whether the companies providing training do not sufficiently comply with their duty to monitor or whether trainees often conceal part-time employment from the company because, for example, such part-time work would not be approved or because they are working "cash-in-hand".

The trainees take on part-time work for a variety of reasons (cf. Figure 9). Over a quarter of trainees state that they only pursue part-time employment because they would otherwise be unable to finance their basic needs (rent, food and similar). 38% require the extra money to meet basic requirements and also to fund additional wishes. 35% do not absolutely require a part-time job and use it only to fulfil extra wishes.

As expected, clear differences in reasons for taking on a part-time job are revealed depending on the level of training allowance received. The proportion of trainees needing part-time employment (partly) to meet their basic requirements is considerably higher amongst those receiving a low net remuneration of up to €400 than is the case with those trainees who earn a relatively high training allowance of over €600. Notwithstanding this, we need to bear in mind that these are the trainees' own evaluations and are dependent on respective individual circumstances rather than representing a minimum requirements level such as that used as the basis of calculation for the training support grant.

Influences on satisfaction with training allowances

As already described, the trainees were asked whether they considered the training allowances they recieved to be too low, just about right or very good whilst also taking into account the expenses incurred by the company in providing training and their own work performance for the company. The aim of emphasising these two aspects was to ensure that the trainees did not deliver their verdict in a completely spontaneous and emotional manner. Nevertheless, no purely rational and objective consideration can be expected. The assumption should be that the evaluation of training allowances is also informed by diverse further aspects, such as the trainees' own life situations, individual material ambitions and specific training conditions and therefore tend to suggest an expression of satisfaction with the remuneration paid. For this reason, the following assumes that evaluation of training allowances as "just about right" and "very good" indicates satisfaction, whereas the verdict "too low" denotes dissatisfaction.

The fact that higher training allowances are not necessarily connected with a greater degree of satisfaction has already been made evident by dint of the fact that trainees in West Germany are scarcely more satisfied despite earning considerably more. The aim of the following, therefore, is to investigate the question of which factors influence satisfaction with training remuneration in overall terms. A statistical explanation model has been constructed starting with the initial premise that satisfaction with training allowances is subject to similar influences as is the case with wage satisfaction.

Business administration theory assumes that two factors exert a critical influence on wage satisfaction (SCHREYÖGG/KOCH 2007). The first of these is that the ratio between a person's level of ambition and wage plays an important role. This means that the amount of the wage that a person feels he or she could justifiably be able to claim is contrasted with the actual wage. Secondly, social comparison is also of great significance. This means that a person always places his or her own ratio between expenditure and return in relation to the expenditure-return ratio for the comparable group relevant to such a person. This means that wage satisfaction is ultimately always the result of the comparison between individual expectation of the level of the wage (target wage) and the real wage paid (actual wage). If from an individual perspective there is a correlation between such a target and actual wage, wage satisfaction can be assumed to exist. If, however, the target wage is higher, the assumption is that the person is dissatisfied.

In 2008, the main focus of the Swiss "Human Relation Barometer", an annual representative survey of employees in Switzerland, was placed on an investigation of wage satisfaction (GROTE/STAFFELBACH 2008). The result which emerged was that wage satisfaction is not solely dependent on the absolute amount of income. Fairness of distribution proved itself to be more important. This means that if someone with the same activity profile earned more, this was perceived as being unjust. Notwithstanding this, the crucial factor for wage satisfaction according to this study was the so-called psychological contract. This term was used to refer to the non-legally regulated elements of the work relationship, meaning the reciprocal expectations of employees (e.g. responsibility, decision-making scope, co-involvement, flexible working times, continuing training opportunities) and the employers (e.g. commitment and loyalty). If employees sensed that their qualitative requirements were fulfilled at their workplace they were more satisfied with their wage.

Against this background, a diverse range of further variables were included in the explanation model for satisfaction with training allowances alongside the amount of the (actual) remuneration. The assumption was that these variables may increase or weaken the expectations of the trainees with regard to (target) remuneration (cf. Figure 10). This initially involved variables which provide information as to which work performance the trainees themselves believe that they bring to the company, meaning the proportion of skilled activities they perform (i.e. activities which are the equivalent of works carried out by skilled staff within the company and which the trainees have fully mastered) and the number of hours of overtime worked. The assumption was that expectations of remuneration would rise in line with the level at which the trainees estimated their own performance. Secondly, consideration was accorded to personal characteristics which could have an impact on the level of ambition of the trainees (age, gender, migrant background, school leaving qualifications, the sense of being an adult, the importance of earning a lot of money whilst undergoing training). Thirdly, a series of different situative characteristics were included. The aim within this process was for the variable "relative level of remuneration compared to the class" - which indicates whether a training allowance is considerably above or below the average within the respective vocational school class - to provide an insight into the influence exerted by social comparison. The variable "part-time job to meet basic needs" takes into account whether a trainee takes up a part-time job because he or she estimates that remuneration paid is insufficient to cover his or her basic requirements. If this statement is true, the expectation is that the effect on satisfaction with the training allowance will be extremely negative. The variables "punctual payment of training allowance" and especially "quality of company training"¹⁹ were included in the model to provide essential components of a "psychological training contract". If the trainees' expectations with regard to punctual payments and good quality training are fulfilled, this is likely to be positively reflected in training allowance satisfaction. The variables "occupation", "company size class" and "West or East federal state", for which considerable differences in satisfaction with training allowances were shown in the bivariate observation, were also included in the model.

The results of the logistic regression presented in Figure 11 ²⁰ show what the significant influencing factors on satisfaction with training allowance are. In line with expectations, the amount of training allowances - with control of other factors - exerts an independent influence on satisfaction. If remuneration is higher, the chance that trainees will be satisfied rises. Compared to a training allowance of €300 or under, the chance of satisfaction is twice as high if the training allowance received is between €301 and €400. If remuneration exceeds €700, this chance rises 17-fold.

As was to be expected, a large number of other additional factors also play an important part. The scope of activities performed at skilled worker level (i.e. work which is the equivalent of the deployment of skilled workers within the company and which the trainees are able to perform just as well) is shown to exert a clear influence on satisfaction with training allowances. The greater the feeling experienced by the trainees that they are delivering a high work performance which is the full equivalent of that provided by skilled workers, the lower the chance that they view their remuneration as fair and that they are satisfied, since the training allowance they are paid is far below the remuneration received by skilled workers.

Work deployment which regularly extends beyond normal company working time also decreases the chance that trainees will be satisfied with their remuneration. This effect is intensified the more hours of overtime they are required to perform. A further critical factor is, however, whether they are granted time off in lieu or receive extra payment for hours of overtime worked. An adverse effect is exerted on remuneration satisfaction if compensation for overtime is never given or only sometimes takes place.

As far as personal characteristics are concerned, higher age of trainees produces a negative influence on remuneration satisfaction. This comes as no surprise. On the one hand, the group of trainees aged over 21 may be expected to have higher material ambitions compared with the group of younger trainees. Secondly, it is likely that the wish for financial independence from the parental home is significantly more marked on the part of the former. Notwithstanding this, both these effects are not solely dependent on actual age. It is also significant whether trainees still tend to feel that they are young people or already regard themselves as autonomous adults. If the latter is the case, a negative effect on remuneration satisfaction also ensues.

By way of contrast, the characteristics of "Gender", "Migration background" and "School leaving qualification" do not exert any significant influence on whether the trainees are satisfied with their training allowance or not. This means that, with control of all other influencing factors, there is no evidence that there is any difference in remuneration satisfaction on the part of men and women, migrants and non-migrants and trainees with a maximum of lower secondary school leaving certificate, intermediate secondary school leaving certificate and higher educational qualifications.

On the other hand, individual level of ambition plays a clear role. The more trainees stress the importance of earning a lot of money whilst training, the lower the chance that they will be satisfied with their remuneration.

It is quite usual for young people to exchange information about training allowances within their vocational school class. To this extent, each trainee is able to compare him or herself with other trainees from within the same training occupation and training year. The results of the model with regard to the relative remuneration level of the class demonstrate that this "social comparison" has a considerable effect on remuneration satisfaction. Remuneration at least 20% above the class average is linked with a significantly higher chance of being satisfied with the training allowance than when remuneration paid tends towards the average. By the same token, a training allowance which is at least 20% below the class average is viewed as unjust and has a correspondingly negative influence on remuneration satisfaction.

In the case of trainees who pursue a part-time job in order to meet basic needs - i.e. who themselves perceive that they require this additional money (at least in part) because their training allowance is insufficient to finance their fundamental requirements - there is a considerable increased risk of dissatisfaction with the remuneration they receive compared to trainees who do not (have to) take on a part-time job.

A negative effect is also exerted on remuneration satisfaction if punctual payment of the training allowance sometimes (or even often) does not take place.

The quality of company training also has a large effect. The better the trainees evaluate the various quality criteria in overall terms, the higher they view the fulfilment of their expectations in respect of receiving "good training" from the company and the greater their level of satisfaction with their training allowance.

Effects exerted by the training occupation are discernable in some areas. The chance that trainees will judge their training allowance to be acceptable is more than twice as high in the occupation of "Office management clerk" than in the occupation of "Plant mechanic for sanitary, heating and air conditioning systems". With control of other influencing factors, the chances of remuneration satisfaction are comparatively higher in the occupations of "Information technology specialist" and "Industrial mechanic" and, by way of contrast, significantly lower in the occupation of "Medical assistant". The present study is not in a position to evaluate the precise reasons for this. It may be that a higher degree of satisfaction (or dissatisfaction) on the part of trainees with their occupation and the assessment of future prospects as good (or bad) play a part.

An independent effect is also exerted by company size. Compared to smaller companies (up to 49 employees), the chance of remuneration satisfaction is significantly higher in larger companies (500 employees and upwards). This is another area where precise indications as to the causes of this are absent. There may be a correlation with better opportunities for permanent employment and occupational development after training and with the better image of larger companies.

Finally, the influence exerted by region needs to be recorded. With control of other factors, there is a significantly higher chance that trainees in the federal states of the former East Germany that trainees will be satisfied with their remuneration than is the case in the federal states in West Germany. Causes here may include the cheaper cost of living in East Germany, which is on 5.6% lower than in West Germany on average especially due to more favourable prices for rents, household services and goods which tend to be traded at a local level (KAWKA 2010). It is, however, also possible that the generally positive image enjoyed by in-company training compared to extra-company training, which remains very widespread, influenced the evaluation of training allowances by the young people from East Germany.

Conclusion

The Vocational Training Act stipulates that trainees should receive an "appropriate allowance" from their company. The precise definition of this term is, however, largely still left to the judgement of the two sides of industry and the individual companies. This has led to the emergence of considerable differences in amounts of remuneration according to branches of trade and industry, regions and collective bargaining coverage of the companies.

The trainees' own ambitions in terms of the amount of allowance they receive and the question of whether the training allowances actually paid are sufficient to fulfil these ambitions are topics which are rarely addressed. The most recent investigation of this issue conducted by BIBB took place more than ten years ago (HECKER 1998). This study showed that, at the end of the 1990's, over one third of trainees judged their training allowance to be just about right or very good whereas just under two thirds considered that their remuneration was too low²¹. There are a number of indications which suggest that trainee expectations of their training allowance have risen since this time (increased age, higher requirements in terms of mobility, higher level of productive work within the companies). If the inflation rate is taken into account, virtually no increase of training allowances in real terms has taken place over the course of the past ten years (BEICHT 2009). In light of these developments, the fact that remuneration satisfaction has not improved hardly comes as a surprise. Only just under a third of second year trainees currently regard their training allowance as just about right or very good whereas over two thirds believe that their remuneration is too low.

The average net monthly amount paid of €426 is not sufficient to enable trainees who have moved out of their parental home to finance their basic requirements. As many as 27% of trainees in the 15 occupations forming the present object of study have a regular part-time job. 65% of these trainees adopt this course because they would otherwise have too little money to cover their basic needs. Whereas part-time jobs taken on by higher education students are a topic which is often addressed and an area in which the drawbacks are often indicated, any debate of part-time jobs by trainees is virtually non-existent. The "Vocational Education and Training Legal Guide" issued by the Association of German Chambers of Industry and Commerce (DIHK) states as follows. "Vocational education and training is full-time training.  Trainees who take their duty to learn seriously will have little opportunity for any part-time employment activities." (HURLEBAUS 2006:65). The present study reflects a quite different picture of reality. A considerable proportion of trainees pursues a part-time job, particularly in circumstances where training allowances are low. Although part-time jobs may have a positive impact - they may, for example, provide an opportunity to deploy competences acquired during training in an autonomous manner or obtain additional competences in other occupational fields - this must not be permitted to jeopardise the success of training or even result in a negative effect on health due to a lack of time for rest and recuperation. This is an area in which companies providing training need to take more precise heed of the extent to which their trainees pursue part-time employment in addition to training.

Whether trainees are satisfied with their training allowance or not depends strongly on the amount of remuneration paid. The chance of remuneration satisfaction is, for example, 17 times higher for trainees receiving a net amount of more than €700 than is the case for those paid €300 or less. Notwithstanding this, the present analysis also shows that satisfaction with training allowances is influenced by numerous other factors. The trainees' own evaluation of the work performance they deliver for their company plays a major role. The more trainees feel that they are being deployed in the same way as a fully trained skilled worker the greater their expectations of corresponding remuneration will be. By the same token, trainees are also prepared to give companies credit for fulfilling their training obligations by providing good quality training and by ensuring that training allowances are paid punctually. In such cases, the chance that trainees will be satisfied with a somewhat lower level of remuneration rises.

Remuneration satisfaction also depends, however, on factors which the individual company is unable to influence. The age of trainees within the dual system has, for example, undergone a constant increase in recent years due mainly to the problems of making the transition from school to training. There is a frequent correlation between the higher age of the trainees and a wish for independence from the parental home. Ambitions in respect of the amount of training allowance then rise correspondingly.

In the light of demographic change, companies will find it increasingly difficult to find young people to fill their training places over the coming years. The consequence of this will be that not only will companies have to compete amongst themselves to secure the services of the most able school leavers but will also fundamentally need to make it clear why dual training is an attractive option compared to other training pathways such as Bachelor courses of study. Against the background of the results of the research project "Vocational Training from the Trainees' Point of View", branches and companies are afforded a promising opportunity to recruit the dwindling future supply of young people by offering good quality of training and favourable occupational development chances as well as providing a high training allowance.

Related literature

Translations of the titles, authorship details and publication references of German language literature are provided in [italics in square brackets]. These are intended merely as an indication of the contents of these works and the nature of the source and do not necessarily suggest that these works are available in English.

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Imprint BIBB REPORT

BIBB REPORT Volume 4, Issue 14, June 2010 ISSN Internet: 1866-7279 ISSN Print: 1865-0821 Published by Federal Institute for Vocational Education and Training (BIBB) The President Robert-Schuman-Platz 3, 53175 Bonn Publishing house, advertising, distribution W. Bertelsmann Verlag GmbH & Co. KG Postfach 10 06 33, 33506 Bielefeld Telephone: 0521 91101-11 Fax: 0521 9110119 http://www.wbv.de/ service@wbv.de Print version The print version of this publication can be ordered from W. Bertelsmann Verlag GmbH & Co. KG.. Further information www.bibb.de/impressum

Editors Harald Pfeifer Dr. Günter Walden Dr. Eckart Strohmaier (in charge) Editorial assistant Heike Rotthaus Katharina Faßbender Telephone: 02 28 / 107-17 17 E-Mail: bibbreport@bibb.de Copyright Reproduction of this publication - in part or in whole - is prohibited without BIBB's prior permission. Point of contact regarding content Ursula Beicht - beicht@bibb.de Andreas Krewerth - krewerth@bibb.de