Measures to promote youth employment debated

Efforts to come to terms with employment problems among the under-19 age group have been pitching the Austrian social partners against each other over 1997. Labour representatives favour short-term measures, while employers' organisations are seeking legal change with long-term effects.

The social partners are engaged in a protracted debate on the ways and means to address a mounting problem of youth unemployment. The best indicator of the extent of the problem is perhaps that on average 2.9% of those aged 15 to 18 years were neither employed nor in school during 1996, while a figure of 2.3% or 2.4% prevailed between 1993 and 1995 (as well as in 1988) with a low of 1.9% in 1989. These young people out of work fall into two categories. One group is looking for a "regular" job, the other for an apprenticeship position. In 1996, for the first time, the latter outnumbered the former on annual average. The number of regular job seekers - oscillating between annual averages of 4,400 and 5,000 - remained at a relatively stable level throughout the 1990s. The number of apprenticeship seekers, however, rose from annual averages of 3,100 between 1989 and 1991 to 5,600 in 1996, with a further increase in 1997. In other words, the problem has not only grown, it has also shifted from finding re-employment to finding first-time employment, and from finding unskilled employment to finding skill-forming employment.

The situation is generally worse for young women than for young men. While only 2.4% of males were neither employed nor in school in 1996, the same was true of 3.4% of females.

As previously reported (AT9706116F), the problem arises partly from the short-lived "baby boom" of the early 1980s, and in part from a secular decline in demand for apprentices. The demographic cause will disappear within the next couple of years but the future intake of apprentices is both less predictable and open to political intervention. In the past, annual intake decreased by an average of 1,800 per year between 1980 and 1985, 1,400 per year between 1985 and 1990, and 1,500 per year between 1990 and 1995, but it decreased by less than 300 between 1995 and 1996. Nonetheless, the apprenticeship issue came onto the agenda in 1997. The general direction has been to raise the inclination of employers to open up apprenticeship positions. However, the issue has developed into a bone of contention between the social partners. They are decidedly at odds over the measures that need to be taken.

Increasing the inclination to offer apprenticeships

A study carried out for the Federal Chamber of Labour (Bundesarbeitskammer, BAK) in 1996 showed that 40% of apprenticing establishments increase their earnings by employing apprentices, while the other 60% do not. Legislators therefore aimed their first measures (AT9702104N) at reducing the cost of apprenticing. Employers, however, have consistently proclaimed cost not to be the primary issue. They would rather see measures increasing the earnings capacity for employers of apprentices. One of their main demands in this respect has been to be given more leeway to terminate the contracts of apprentices. Currently the Occupational Training Act (Berufsausbildungsgesetz, BAG) specifies essentially six conditions sufficient for termination: theft, embezzlement or other punishable deeds; insult, threat, or assault of the employer, the employer's household members or employees, as well as indecent behaviour and incitement of co-workers to behave unlawfully; recurrent breach of legal or contractual duty (such as missing vocational school or "shirking"); breach of company secrecy, or using skills for gainful purposes without the consent of the employer, or pursuing other occupations detrimental to the training purposes of the apprenticeship; unauthorised leave from the training site; and acquired inability to learn the occupation if a return of the required abilities is not expected within the contractual duration of the apprenticeship.

In Vienna in 1996, according to the Chamber of Labour, 2,900 or 17% of 16,700 apprenticeships were terminated. Of the terminations, 23% were for any of the above reasons, 17% were by mutual agreement, 25% were initiated by the apprentices, and 35% occurred during the initial probationary period. The Austrian Chamber of the Economy (Wirtschaftskammer Österreich, WKÖ) wants a clause permitting termination when apprentices do not perform to expected standards. This would enable enterprises to retain only the apprentices deemed profitable.

In the same vein, a lengthening of the probationary period has been demanded. It is now eight weeks, or the first four weeks in the establishment if the first eight weeks were spent in vocational school. Up to three months in the establishment has been suggested as the necessary trial period.

Further, WKÖ suggested the creation of an on-the-job training scheme with limited formal training, without school attendance requirements, and with remuneration below that of apprentices, in order to absorb young workers not qualified for an apprenticeship.

In addition, there are proposals to make workers hired as apprentices more profitable for their employers. These are centred mostly around working time regulations. Apprentices under the age of 18 cannot be employed after 22.00, while Austrian law stipulates that the two days off per week have to be in succession, and the WKÖ wants this to be changed in order to make it easier to employ apprentices on Saturdays.

Labour organisations are opposed to all these proposals, seeing them as a threat to skill formation and thus to the position of workers in relation to management. Further, with less skilled workers average wages, as well as the steadiness of employment, will be diminished.

Agreement exists between employer and labour organisations regarding the need to create new "apprenticeable" occupations. Partly, these will be in newer activities such as computing, telecommunication, and the environment. Others will be created out of combining hitherto separate occupations into one, facilitating the delivery of more complete services.

Alternative routes to skill formation

Labour organisations favour two other approaches. The first is to give responsibility for apprenticing to further education organisations, which will conclude partnership agreements with enterprises enabling apprentices to spend one or two days per week on a job. The remainder of the time they will receive additional training from the organisation and attend vocational school together with other apprentices. In a similar scheme being negotiated in Vienna, there will be more emphasis on schooling and less on experience on the job. This will also help to utilise as fully as possible the vocational schools, where attendances have been falling as the number of apprentices has dropped. In this latter scheme, the participants may not be apprentices in the sense of the law - in which case, they would receive only "pocket money" rather than the training remuneration apprentices are paid. In both schemes, however, participants will at the end be eligible for apprenticeship graduation exams. The financing is underwritten by local, provincial, and national government as well as the Public Employment Service (Arbeitsmarktservice, AMS). The public financing is the main reason why these schemes are treated as short-term measures until the situation in the labour market improves.

The employer organisations oppose such measures because they are short term. They insist that structural changes in the system of skill formation are necessary in order to arrive at a sustained improvement in the supply of openings for apprentices.


The Government and labour organisations have been focusing their efforts on: reminding employers of the benefits and the necessity of the "dual training system" for both enterprises and society; the provision of financial incentives for enterprises to provide apprenticeship positions; and devising schemes intended to circumvent the shortage of openings for apprentices in the short term. There appears to be little agreement with employer organisations that improved profitability of apprenticeships for companies is needed in order to sustain the system in the longer term.

The short-term measures, like so many provisional measures in the past, are likely to become a fixture. In effect, they initiate a trend toward making skill formation a part of the state educational system and relying less on enterprises for formal training.

At the same time, 15-year-olds are developing a tendency to stay in school. This is true even among foreign nationals, who had never before entered the secondary school system in significant numbers. (August Gächter, IHS)

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