Contribution to EIRO thematic feature on Youth and work - case of Austria

Source: AMS

For the end of October 2005, the AMS statistics identify 42,520 people aged in between 15 and 24 as unemployed (ie 17.9% of all unemployed persons). In relation to the comparable 2004 figures, youth unemployment increased by 10.4%. In addition to some 20,000 young people attending AMS courses, almost 63,000 people aged under 25 were lacking a job or an apprenticeship in the end of October 2005.

In order to tackle the problem of increasing youth unemployment, the government has launched a series of special programmes:

• Since 1997, in response to economic changes, the current government and its predecessors have created a number of new apprentices trades and occupations as an important measure to enhance the employability of young people. According to evaluations, most of the new apprenticeships seem to have been widely accepted (AT0010231F).

• In September 2002, the coalition government of the conservative People’s Party (Österreichische Volkspartei, ÖVP) and the populist Freedom Party (Freiheitliche Partei Österreichs, FPÖ) introduced a comprehensive youth employment programme. This programme provides financial incentives for companies to employ apprentices, with employers receiving annual payments of EUR 1,000 per apprentice employed for three years (AT0303201N). Moreover, companies offering apprenticeships are exempt from paying social insurance contributions in respect of apprentices. Apart from this, under the JASG the government extended the capacity of qualification courses for young people who have failed to find an apprenticeship (AT0210201N). All these measures have been funded by the reserves of the AMS. However, in the face of youth unemployment rates further rising and the shortfall in apprenticeship places exacerbating the success of these measures has been questioned by experts and organised labour. Nevertheless, these programmes have been maintained.

• Since 2004, an annual special Jobs for You(th) programme has been initiated by the government in order to create some 10,000 jobs for young people. The AMS has been commissioned to realise this programme, which has resulted in an increase of qualification measures for young people younger than 25 by more than 50% in the period 2001-2004.

• For the training year 2004/5, the government and the nine provinces (Länder) provided some EUR 71 million for a significant extension of the so-called safety net under the JASG (ie qualification programmes targeting young people who have failed to find an apprenticeship). Under this title, almost 8,000 places were subsidised in 2004/5. According to the Ministry of Economy and Labour, two out of three participants have managed to find a regular apprenticeship place afterwards.

• On 1 September 2005, a new programme called Project 06 came into effect, which aims to give additional incentives for companies to provide apprenticeships. The plan is to create an additional 2,000 apprenticeship places. When joining this promotional programme, companies and training institutions (if equipped with the right to provide vocational training according to the BAG) will receive a fixed payment of EUR 400, EUR 200 and EUR 100 per month in the first, second and third year, respectively, for each apprentice to be newly engaged (after the reference date of 31 December 2004) and trained for the whole three years until the final examination.

• In November 2005, the AMS started a new coaching programme targeting the currently about 1,500 long-term unemployed people aged under 25. Under this scheme, the target group shall be supported by trainers specifically skilled in job placement of handicapped persons. The aim is to at least temporarily place these people in the regular labour market. Companies engaging long-term unemployed young people will be partially exempted from (indirect) labour costs for one year. The Chamber of Economy (Wirtschaftskammer Österreich, WKÖ) supports this measure by contributing part of the expenditures involved.

3. Role and views of the social partners on Youth at work

Please provide brief details of the role and views of the social partners regarding the current policies and regulatory framework on youth employment in your country.

a) Do the social partners play a specific role in youth employment policy shaping? In Youth employment policy implementation? At what level (National/sectoral/company)?

b) How do the social partners contribute to specifying qualification and initial training needs for the national economy?

c) What are the main issues collective agreements on youth employment deal with?

d) Is there any sectoral plan/programme/action aimed at attracting and/or retaining young people in sectors lacking of workforce availability? Has this plan/programme/action been jointly -between Trade Unions and Employers Organisations- conceived and implemented? If not who devised it?

e) If a sectoral plan/programme/action existed, what were the objectives, the target, the content?

f) What were the results?

(a)

The social partners are traditionally strongly involved in all social policy matters. Within the various bodies of the AMS, which is the core labour market agency at national and regional level, representation and thus influence of the social partners is strongly institutionalised. Since most government employment policies, also that affecting young people, are being realised by the AMS, the role of the social partners in designing and implementing youth employment policies is most important.

(b)

Issues related to youth employment and training in Austria are primarily negotiated in a special corporatist advisory council, the Federal Vocational Training Advisory Council (Bundes-Berufsbildungsbeirat). According to the BAG, the task of this council is to review government proposals in this area, including amendments to the legislation on youth training and apprenticeships issues (AT0010231F).

(c)

The main issues of collective agreements in the field of youth employment are (minimum) remuneration rates for apprentices and provisions allowing a more flexible arrangement of working hours as compared with the standard regulation according to the KJBG.

(d-f)

No information about sectoral programmes/plans is available.

4. Discussions and research

Are there currently discussions underway about ways to tackle the issue of youth unemployment among trade unions and employers’ organisations?

Please specify the main recent research on that topic.

Is there any short term policy planned?

The WKÖ, in principle, supports all government measures (listed under section 2 above) to tackle the problem of youth unemployment. In particular, it approves programmes which give financial incentives for companies to either provide apprenticeship places or employ regularly (long-term) unemployed young people. WKÖ clearly prioritises direct subsidies to enterprises compared with qualification courses of the so-called safety net. As mentioned above, WKÖ participates in the recently introduced AMS-based integration project targeting long-term unemployed people aged under 25 by contributing part of the expenditures.

Organised labour, ie the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB) and the Chamber of Labour (Arbeiterkammer, AK), have repeatedly blamed the businesses for only insufficiently assuming responsibility to provide apprenticeships. In general, they blame the companies’ declining willingness to participate in the dual system of vocational training, while the latter deplore the alleged shortage of skilled workers themselves. Actually, the number of employers offering apprenticeship places has declined by 40% since 1980 (from 194,100 to 119,000 in 2004, AT0502201N). The AK has rejected the employers’ complaints about allegedly excessive costs in respect of apprentices’ training. (Indirect) labour costs payable with respect to apprentices often amount only to 40 or 50% of that payable for an unskilled, regular worker - irrespective of the state benefits of about EUR 120 million in 2004 for that companies employing apprentices. Moreover, both the AK and the ÖGB, in particular its youth organisation, have called for a general increase of the AMS budget by at least EUR 60 million per year in order to improve its placement and information services and, in particular, the introduction of a charge on companies that do not engage in the dual system of vocational training; the revenues from this charge should be given to employers providing apprenticeship places (AT0509202N). In addition, organised labour demands a further extension of the safety net provided by qualification programmes for young people who did not find an apprenticeship. Within this safety net scheme, special training programmes should be introduced culminating in a final examination entitling the participant to perform a formally recognised occupation. (At present, qualification courses do not result in such a recognised examination but are devised only to bridge the time gap caused by delays and interruptions in the course of a young person’s education, AT0303201N).

Apart from some statistics and a few psychological studies focussing on the problem of youth unemployment, there is hardly any national research in this field.

5. Commentary

Austria is one of the countries which has established a dual system of vocational training, which means that vocational training takes place at special schools and in companies providing in-service training and further training. For a long time, the system proved effective, since the method of training within firms at relatively low pay was reflected by a relatively low level of youth unemployment. However, during the past two decades, a dramatic shortage of apprenticeship places has emerged, due to intensified company rationalisation and personnel reduction measures. This has resulted in youth unemployment rates rising faster than average unemployment.

In response to this development, the conservative-populist government has initiated a considerable expansion of traditional active labour market instruments especially targeted for young people (such as training and qualification programmes). Moreover, it has offered financial incentives for firms to employ apprentices and young workers. However, such incentives have failed their goals to improve employment opportunities for young people and create additional apprenticeship places so far. Therefore, labour market experts suggest to focus employment policies on training for specific occupations and those qualifications which are scarce and strongly demanded by business, instead of generally promoting any kind of apprenticeships by subsidising companies offering them. (Georg Adam, University of Vienna)