Austria draws up national action plan on employment

In early 1998, the Government and the social partners have been engaged in drawing up the action plan on employment required by the European Union "Employment Summit" held in Luxembourg in November 1997. So far a detailed list of measures and explanations has been drawn up, but much of the financing is still unclear as is the political will to carry it out.

Among the conclusions of the special European Council Employment Summit held in Luxembourg in November 1997 (EU9711168F) was a requirement for an action plan on employment, based on the European Commission's guidelines, to be drawn up in each European Union Member State.

Collaboration between the Ministry of the Economy (Bundesministerium für wirtschaftliche Angelegenheiten, BMwA) and the Ministry of Labour, Health and Social Affairs (Bundesministerium für Arbeit, Gesundheit und Soziales, BMAGS) forms the governmental equivalent of the social partners in Austria. It is through these Ministries that the social partners are trying to come to an agreement on the goals for the national action plan on employment and on the measures most likely to achieve its aims in a cost-effective way. By February 1998, there was a 40-page document on the table containing, as it was put by one commentator, "all that is good and expensive in the service of greater employment". It also sets out the points on which agreement is still pending. The deadline is the end of March.

Goals

The five goals of the action plan are to: raise the rate of employment; reduce unemployment significantly; enhance equal opportunities between men and women; create a more flexible education and training system and thereby promote innovation and greater career choice in the interests of dynamic structural adjustment; and foster a new culture of entrepreneurship. The trade unions have been demanding that the goals be quantified. Specifically they are suggesting an increase of 100,000 in employment and a reduction in the rate of unemployment from 4.5% to 3.5% by the year 2002. This is against a backdrop of employment, as reflected in social security figures, that essentially stagnated between 1992 and 1997.

Employment policies

It is agreed to address the employment goal primarily in terms of removing obstacles to and creating incentives for employment. For this, five core policy areas are identified, as follows.

  • To assist the formation of new enterprises, the expansion of existing ones and the opening of new markets through new products and services, new production structures and processes. The Government has offered to direct policy making towards: support for developing markets; an increase in public investment by implementing existing plans; simpler and faster procedures for setting up businesses; the creation and improvement of capital markets; a technology policy; and the support of research and development as well as greater transparency of existing research and development subsidy schemes.
  • To facilitate long-term secure and productive careers of gainful employment and the redeployment of employees under the threat of unemployment to new occupations. Some policy examples are: a tax structure conducive to employment; an improved distribution of the total volume of working hours, including a reduction of seasonal unemployment and of overtime hours; the further development of educational policies including occupational training, the expansion of the apprenticeship system and of polytechnics, greater cooperation between universities, schools and enterprises, more internships in enterprises and the support of investment in human capital by enterprises; improvement of labour mobility by enhancing the transportability of severance pay and company pension entitlements; offering more care facilities for children and older people to enhance the compatibility of family and work; agreements to be concluded between the social partners to remove mobility obstacles by safeguarding lifetime incomes; and a more effective combating of irregular employment.
  • To ensure that those seeking employment find adequate training and job opportunities. To this end, active labour market policies are to be expanded and new instruments developed, and the system of transfer incomes is to be reformed for greater incentives.
  • Support for non-market social services employment.
  • A continuation of the restrictive policies on first-time labour market access for third-country nationals. It is assumed that the process of eastern enlargement of the EU will not lead to an expansion of free movement of labour to new countries until 2002.

Measures

The concrete measures to be taken to achieve all five goals, not just those on employment and unemployment, are categorised according to what the Government's document calls four pillars:

  1. improvement in "employability";
  2. development of the entrepreneurial spirit;
  3. facilitation of the adaptability of employers and employees;
  4. equal opportunities.

In the employability pillar, seven measures (called guidelines) are sketched out. Each has a paragraph on financing and is in turn broken down into detailed measures. The two Ministries' concerns about them, if any, are noted. Guidelines one and two of the seven are aimed at reducing, respectively, the number of long-term unemployed young people and adults. The goal is to halve the entry rate into long-term unemployment. A combination of better information, formation of social, occupational and academic skills, and the creation of a variety of trial jobs, employment subsidies and non-market occupations are to make this come true. Guideline three aims at increasing the number of participants in active labour market measures to 20% of all unemployed people from slightly over the current figure of 10%. All three measures together are estimated to cost ATS 3.2 billion over five years.

Employability pillar guideline four addresses the social partners directly by asking them to conclude collective agreements on: working time flexibility in combination with an entitlement to training leave; an "opening clause" on the financing of training; and job-rotation models in cooperation between enterprises. Overall, this is apparently assumed to be cost neutral. Guideline five aims to absorb at least another 0.8% of the labour force in further education and training. Women in particular are to be addressed. Important measures include drop-out prevention, better information on offers, tele-learning centres, better chances for adults to catch up on educational deficits, a broad general education as a solid basis for further education and training, more research on education and a series of other detailed features. Financing is still unclear and there are some budgetary concerns.Guideline six aims to improve the quality of the school system and comprises 16 detailed measures. The financing requirements are not yet known. Guideline seven is entitled "adaptability of youth" and is basically about modifying, enhancing and safeguarding the apprenticeship system with a particular emphasis on young women. This is accompanied by a very detailed list of 32 measures, though the heading "financing" has been left blank.

Commentary

Experts, even those close to the trade unions, believe the plan's goals to be ambitious. Their realisation will depend on continued economic growth, feasible wage agreements and the implementation of the measures now under debate. In cannot be expected that economic growth will finance the entire package. Also, it is not yet certain that trade unions and employers will in fact see eye to eye on both the content and the financial implications of the employment-centred measures. (August Gächter, IHS)

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