Living and working in Austria

The reasons for the high inflation include high direct government payments and only few and late consumer price interventions (e.g. in electricity or rents). Despite the unfavourable economic situation, the Austrian labour market developed largely positively in 2023. The number of dependent employees grew by around 43,000 and labour shortages were still imminent, with an average of 108,000 vacancies. Unemployment has remained comparatively low (4.9% according to Eurostat definition in November 2023), even though it has been rising since the second quarter of 2023. Youth unemployment is somewhat higher than the average unemployment rate. Besides young persons, particularly affected by unemployment are persons with low formal education and foreigners.

Collective bargaining has become more (and in some sectors even highly) conflictual in 2023 due to the tense economic situation and price increases. In line with the high inflation, collective action in the form of warning strikes took place in several sectors, among them the large retail sector, as well as the influential and pattern-setting metal industry in which strikes were held in 200 companies (out of approximately 1,200 companies). Eventually, face-saving agreements for both sides could be found. Overall, the index of minimum collectively agreed wages provided annually by Statistics Austria shows an average minimum wage increase of 7.6% overall in 2023, as compared to 2022. Blue-collar workers received an average increase of their minimum wages of 7.8%, white-collar workers of 7.3% and public employees of 7.6%. Generally, thus, the rolling inflation of the past twelve months was largely compensated for in the sectoral negotiations, with small top-ups for the lower wage groups as often, staggered wage increases were implemented. Also, in several sectors, bonus payments were paid over the course of a few months, as cost-of-living bonus payments.

Besides wage increases, shorter working hours were negotiated in the collective bargaining rounds in the health and nursing care, as well as the logistics sector. Debates on implementing shorter working weeks or a 4-day working week were ongoing, triggered by organised labour, while organised business is strictly against it in times of labour shortages.

Protests against the high inflation and the rising costs of living took place at the initiative of the Austrian Trade Union Federation in preparation of the autumn bargaining rounds, demanding decent and sustainable wage increases for employees. Organised labour was also quite vigilant in demanding anti-inflation measures from the federal government. Compared to 2022, the government implemented fewer new anti-inflation measures, as in the course of 2023, many of the measures decided upon in the previous year were continued or came into effect. Among the newly implemented measures in 2023 were most importantly a cap on electricity prices and on specific rental payments.