Austrian apprenticeship - the tide has turned

Note:

This article is quite different than from what you normally find on this blog. It is about an economic/social development which I deem interesting and I was inspired to write the following lines by an article in the Bloomberg-Businessweek "Are Austria's Apprentices an Endangered Species?". Enjoy reading and looking forward to your comments!

The view on the Austrian apprenticeship system has severely changed.

When I was about to finish High School in early 2007, it was a time of economic growth, optimism about the future and low unemployment - all over Europe. In Austria we had the discussion about the vices of the apprenticeship system. I remember the arguments like "it puts the young children on a one-way dead-end road to blue-collar jobs", "this divide at the age of 14 is not just" and "Austria needs more university graduates". 

Now, 6 years of living through the economic (financial, debt,...) crisis, Austrian apprenticeship system is praised. It provides almost guaranteed work for our sons and daughters who feel wrong at the track of high-school and following tertiary education. Austrian politicians never forget to say that the unemployment  rate (and especially the youth) is among, if not THE lowest, in Europe.

3 Questions arise:
1.) So what wind caused the sail to change? There are multiple factors, but all can be summarized in to a comparative argument of "we did better than the others". First of all, more than 90% of these young adults have a job compared to about 55% in Spain or Greece, 65% in Italy or 75% even in France. Second, high numbers of university graduates have proved not to be necessarily a good thing. On both sides of the Atlantic, university graduates suffer from underemployment. This is especially severe in the US where students pay far too much money for tuition fees without getting the degrees worth. Next bubble approaching. Third the general economic environment became worse. Job stability became more important than career prospects.

2.) Why is there this apprenticeship system?
Originally the apprenticeship was common in the medieval ages. A master of a certain trade took care of his apprentices for the following three reasons. First, it allowed them to control the competition as the guilds allowed only masters to open a shop,. Second, it provided the master with cheap and guaranteed labor. Third it guaranteed that the skill and knowledge won't be lost,
Despite the fact that these reasons are deeply interesting (and especially the second is ground for critics nowadays), they are not the reason why we still have it today,

In the time of Austrian Keynesianism, it was of great importance to the socialist and unions to protect the apprenticeship system. The provision of a minimum wage in combination with learning a trade was the safety net that prevented drop-outs from a path to unemployment . Furthermore the incentive of poor families to take their children out of school in order to send them working was weakened as they could start earning money while still in school.

3.) Would it help other countries?

Certainly as it exactly tackles the problem that certain countries face: An unemployed youth without any skills. Nevertheless, it is certain that it is not a short-term solution. This change in the education system implies changes in the business world. While this may work comparatively fast in 1-2 years, it is just natural that the people need to live through this 3-5 year process to get into the business.

Where there is light, there is also shadow. And in these shadow are the problems of this apprenticeship system. It hasn't changed that it puts its beneficairies on the blue-collar track (which is ok - but not for all people). Furthermore often the masters don't really teach the apprentices the skills that they should learn and instead use them as cheap labor (just like in the medieval ages).

As the times have changed, so has the view on the apprenticeship system. It might not be a best-practice example, but it certainly provides merits for its beneficiaries and consequently the whole society.