The functional change in employment promotion companies based on their present development in the state of Brandenburg

Abstract

"In respect to labour market policies the last five years can be seen from today's perspective as an extraordinarily intensive phase accompanied by great hopes, as well as a few fears; owing to the known problematical economic development in the new states, these policies were basically subject to permanent adjustment pressures. ABS companies (employment promotion, employment and structural development companies), known simply as employment promotion companies in Brandenburg, represent, in retrospect, the actual innovative element of labour market policies tailored to accommodate the structural collapse of the new states and have played a very important role in the public policy discussions from the very beginning. The following article uses the state of Brandenburg to illustrate to what extent the high expectations for these innovative types of bodies, expressed particularly in the years 1991/1992, have been realized in practice. The development process of the companies is shown by comparing two fuIl surveys carried out on all Brandenburg companies in the years 1992 and 1994. It can be clearly recognized here that they have gone through a process of development that has fulfilled these expectations in a differentiated manner. The following basic statements can be made in regard to the functions that they are supposed to fulfill: Employment promotion companies have played a considerable role in absorbing the shock of the structural transformation, by supporting employees threatened by layoffs with their measures (in moderation) and protecting them from outright unemployment. This cushioning function contributed decisively to the success of the privatisation policies of the 'Treuhandanstalt'.The vocational further training and retraining activities sponsored by the companies, which can be seen as an adjustment function, however, at no time achieved the originally expected dimensions. The number of activities, which were rather few even in 1992 had decreased markedly again by 1994. This, however, is not proof of unsatisfactory performance or reserves, but rather a result of the fact that in Brandenburg, as in the other new states, a sufficient number of courses are already being offered in the meantime by other educational bodies. The bridging function, which was laden with high hopes of linking people to the new jobs which were to have been created, has, in the face of the missing economic impulses, particularly in structually weak regions, also only been partially satisfied. The structural policy function has been fulfilled to a high degree by the employment promotion companies, although not all the aspects which could be included here give support to this positive development. Nonetheless, 60% of all the persons employed by the companies in 1994 were involved in reconstruction measures (ABM = Job Promotion Schemes and § 249h of the AFG = Employment Promotion Act), hence, as a rule, improving tough location factors which could not otherwise be financed (municipal, private). The strong involvement of the companies in so-called committees for regional structural development also developed positively. However, the results in regard to real innovations in products and services clearly did not meet expectations. The major reason for the latter lay in the increasing concentration of the Federal Employment Services on the traditional labour market policy target groups, which in view of financial bottlenecks in the labour markets the authors also regard as a situation with no other alternative. Hence, employment promotion companies are now caught in a position in which they must live with an (increasing) conflict of objectives between this ever more relevant target group function and the structural policy function. This conflict of objectives is already burdened with numerous problems, but as such is unavoidable. Therefore, it should be 'accepted' and positively influenced by projects, with the objectives of both improving individual life situations as well as lessening regional structural deficits." (Author's abstract, IAB-Doku) ((en))

Cite article

Baur, M., Kühnert, U. & Schwegler-Rohmeis, W. (1995): Zum Funktionswandel von Arbeitsförderungsgesellschaften anhand ihrer bisherigen Entwicklung im Land Brandenburg. In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Vol. 28, No. 4, p. 492-502.