Subsidised wageto combat unemployment?

The minister of economic and labour affairs, Martin Bartenstein, supported by Austria’s business and employer organisation WKÖ, intends to introduce 'subsidised wages' in low-wage sectors. Austria’s trade union federation, ÖGB, strongly opposes this measure, arguing that it is only advantageous for employers, and demands an active labour market policy.

In the face of increasing unemployment in Austria Martin Bartenstein, the minister of economic and labour affairs, plans to introduce subsidised wages in low-wage sectors in order to boost employment. The Chamber of the Economy (Wirtschaftskammer Österreich, WKÖ) supports this initiative.

The Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB) and in particular its affiliate the Hotel, Restaurant and Personal Services Trade Union (Gewerkschaft Hotel, Gastgewerbe, Persönlicher Dienst, HGPD), that would be especially affected by this measure, strongly oppose this initiative against unemployment. The ÖGB argues that subsidised wages will only reduce the companies’ labour costs but will not create new jobs. This criticism emphasises that conventionally paid jobs, that would have been created in any case, will be superseded by subsidised low-wage jobs. The chairman of HGDP claims that these subsidies will be given also to flourishing companies only make cheap labour even cheaper for employers and alleges that this measure is an early electoral campaign goody for entrepreneurs.

Trade unions call for a crash employment programme, including the following measures:

  • an increase of the budget of the Labour Market Service (Arbeitsmarktservice, AMS) by EUR 60 million per annum in order to improve its placement and information services;
  • the introduction of a charge on companies that do not engage in the 'dual system' of vocational training, whereas the revenues from this charge shall be given to employers providing apprenticeship places;
  • a reduction of the quota for seasonal workers, in particular from the EU-15;and
  • the extension of childcare facilities and support for women reentering the labour market to combat the increasing unemployment among women.

The ÖGB criticises that Minister Bartenstein, who is in charge of labour and economic affairs, shows a clear preference for business interests and neglects labour issues, disapproving the fact the he presented a growth programme in August but postponed the employment programme to autumn 2005.

This information is made available through the European Industrial Relations Observatory (EIRO), as a service to users of the EIROnline database. EIRO is a project of the European Foundation for the Improvement of Living and Working Conditions. However, this information has been neither edited nor approved by the Foundation, which means that it is not responsible for its content and accuracy. This is the responsibility of the EIRO national centre that originated/provided the information. For details see the "About this record" information in this record.

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