The German workforce numbered 40.5 million in 1999. Strong partnerships between labor, business, and the government after World War II contributed to the construction of a safe and responsible working environment. German companies have been held responsible for a larger array of social and community issues than is normally expected in the United States. The high environmental, health, and safety consciousness of the Germans has greatly contributed to improving general working conditions. German companies are more hierarchical than their U.S. counterparts, and employee relations are often formal. German workers have had the highest level of education in Europe, and as many as 2.5 million Germans, or almost half of the 15-to 19-year-old age group, annually receives vocational training within a range of about 400 occupational specialties, often on the basis of contracts with preselected employers. Combined on-thejob and academic training for apprentices produces many employees with the skills employers need, but the system has not kept up with the number of applicants and some say it needs to be made more flexible and responsive to the changing demands of the economy.
However, the German economy has been traditionally afflicted by a high unemployment rate (averaging a total of 10.5 percent in 1999, with 7.7 percent in western Germany, and 17.3 percent in eastern Germany), and structural unemployment is estimated at 80 percent of the total unemployment. In addition to the economic problems that contributed to high unemployment levels in 1999, the nation-wide collective bargaining system for worker representation produced wage and work time demands that failed to consider differences between regions and companies. The SDP government that took office in 1998 launched an ambitious program to cut unemployment, and more labor flexibility was reached at the company level, especially in eastern Germany. However, the rising number of companies that leave industrial organizations and negotiate contracts and wages at the company level is indicative of the growing discontent with the existing collective bargaining system. In 1998 only 48 percent of western German businesses were covered by a collective bargaining contract and about 25 percent in the east. These western German firms accounted for about 68 percent of total employees and for about 50 percent in the east. Trade union activism, however, has also been on the rise since 1998 to counter these changes in the traditional German economic model. In early 2001 a new union, ver.di, was formed as the world's largest union with 3 million members, comprising the unions of white-collar workers (DAG), the public sector (OTV), banking and retail (HBV), and postal workers and the media (IG Medien), with the purpose to represent labor across the growing service sector.