Controversy over rise in women's unemployment

The figures for June 2004 indicate that women's unemployment is rising in Austria, while men's is decreasing slightly. This is officially attributed mainly to poor economic demand in some service sectors that mainly employ women. Recent studies suggest that rising unemployment among women is strongly related to deteriorating employment conditions, in particular in terms of flexibility. In response to these developments, trade unions and the parliamentary opposition have demanded a range of measures to improve women's employability, while the government considers the current rise in women's unemployment to be cyclical.

According to the latest data from the Labour Market Service (Arbeitsmarktservice, AMS), there were 202,787 unemployed people on average in June 2004, which corresponds to an overall unemployment rate of 5.9%. This represented a slight increase of 0.9% on the same month in 2003. A notable feature is that the rise in overall unemployment - in contrast to the trend over 2001-3 - results exclusively from an increase in women’s unemployment, whereas men’s unemployment has decreased slightly, as has youth unemployment. This marks a possible turning point in a long-standing and continuous tendency of rising unemployment among the latter groups since 2001. It is important to note that all these figures are calculated according to the Austrian method of counting unemployment, as established by the AMS. The EU method of calculation produces an unemployment rate of 4.2% for June 2004.

Insecure women's labour market

The number of unemployed women registered with the AMS in June 2004 was up 2.7% on the June 2003 figure, at 94,156, while men’s unemployment fell by 0.6% to 108,631 during the same period. According to the Ministry of Economy and Labour Affairs, the current sharp rise in female unemployment is mainly caused by poor domestic economic demand in parts of the services sector which - to a large extent - employ women. In particular, business-related services (unemployment up 5.3% compared with June 2003), other private services (up 8.4%), retail (up 3.7%), health and social services (up 7.3%) and tourism (up 3%) are most affected by unemployment growth.

In 2000, at the beginning of the slowdown in economic activity, jobs were primarily lost in the manufacturing industry, which mainly hit men, while women’s employment, in particular in terms of part-time work, has risen slightly since then. However, critics argue that the quality of jobs offered to women has significantly declined over recent years, in terms of both job security and pay - this relates to the growing incidence of part-time work, including 'minor work' performed by 'minimally employed workers' (AT0308201N). The Chamber of Labour (Arbeiterkammer, AK) pointed out in spring 2004 that, despite a small total growth in employment relationships since 2000, the number of jobs in terms of full-time job equivalents had fallen by 28,000 over the same period, due to an increase in (mostly female) part-time work.

This tendency of increasing numbers of employment relationships that are 'non-standard' in terms of working time corresponds to an overall movement in the Austrian labour market towards more flexible and 'atypical' employment arrangements. For example, the number of 'minimally employed workers' (who are not covered by general health and pensions insurance and are unlikely to make a living on their own, due to extremely low pay) has been increasing continuously over the last decade, at present standing at about 220,000. More than 70% of those who are working under a 'minimal' employment contract are women.

Apart from this, certain segments of the Austrian labour market (mainly those that are dominated by women) are shaped by large-scale fluctuations in employment. For instance, a 2004 study of employment in the commerce sector conducted by the Austrian Institute of Economic Research (Österreichisches Institut für Wirtschaftsforschung, WIFO) found that jobs in this sector, in particular in retail, are especially insecure. According to the study, about 47% of all employment relationships in commerce, and about 52% in retail, are terminated within one year. The - often female - employees’ risk of losing their job is about one-third higher in commerce than in the overall economy (AT0405202F). This fluctuation results from a widespread practice among many companies, not only in the commerce sector, which is referred to as 'just in time' employment. This means that the employee is hired flexibly for only a short-term period of higher demand for labour and immediately discarded after this period. At present, about 40% of unemployed people registered with the AMS have an assurance of future re-employment with their last employer (which dismissed them). This suggests to some observers that an increasing number of employers apparently regard the practice of periodically hiring and firing the same staff (by systematically using the AMS as a 'staff pool') as appropriate means of saving labour costs. However, this practice causes considerable costs for the AMS and significant income losses for the employees concerned, the trade unions claim.

Organised labour criticises government policy

Both the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB) and the AK, alongside the parliamentary opposition parties - the Social Democratic Party (Sozialdemokratische Partei Österreichs, SPÖ) and the Greens (Die Grünen, GRÜNE) - have harshly criticised the current government, accusing it of being completely inactive in labour market matters, instead of promoting active labour market instruments and stimulating economic growth through investment policies. The coalition government of the conservative People’s Party (Österreichische Volkspartei, ÖVP) and the populist Freedom Party (Freiheitliche Partei Österreichs, FPÖ) has rejected such criticism by attributing unfavourable labour market developments to the ongoing poor economic growth. Rather, the government claims that the recent decline in men’s and youth unemployment is a result of its successful employment policies, in particular with respect to youth employment programmes launched since 2002 (AT0210201N) and various measures aimed at promoting the reconciliation of work and care responsibilities (AT0310201N and AT0304201N).

However, organised labour argues in particular that the measures explicitly introduced by the government in order to improve women’s opportunities for participating in the labour market have failed to achieve their goals. For instance, the childcare benefit scheme that was introduced in 2001 has, according to recent studies, promoted women staying at home with the children for a longer period rather than encouraged them to resume their work. The scheme provides for uniform payments for up to 36 months for all parents with childcare commitments, regardless of their employment situation, and thus favours young parents without a long record of income (AT0404203F). Arguing that any delay in women’s return to employment after parental leave reduces their employability, organised labour has called on the government to amend the childcare benefit scheme. In particular, organised labour demands that employees should be protected against dismissal during the whole period of receipt of childcare benefit, as under the current regulations this protection expires after 24 months (ie the parental leave period).

Labour representatives also urge the government to provide additional funds for the AMS to launch a special re-employment programme for women in order to compensate for the supposed deskilling effects resulting from periods of labour market absence. Moreover, given a current shortfall of some 90,000 childcare places, organised labour has repeatedly demanded a significant increase in childcare facilities in order to enable women to accept 'standard' full-time jobs. However, the government has described these demands as inappropriate and too expensive.


By international standards, Austria’s unemployment rate is still relatively low, although - in line with a widespread international trend of sharply rising unemployment since the 1980s - the country is far from full employment as experienced in the 1960s and 1970s. This relatively favourable record may be traced to several factors. First, combating unemployment has been a priority element of economic policy for a longer period than in most other European countries. Second, pay policy and monetary policy have always been harmonised such that it has never been necessary to impose restrictive monetary policies as an austerity measure. Third, due to high pay flexibility, pay policy responds flexibly to the labour market situation. Last but not least, the 'dual system' of vocational training contributes to low youth unemployment.

Regardless of this, growing competition among companies within the single European market has put pressure on the domestic labour market. These growing pressures have not led to a corresponding expansion of active labour market programmes. Austria’s labour market policy has been rather passive, with the emphasis on benefits to compensate for loss of earnings. Despite some recent initiatives to fund special AMS programmes in order to promote youth employment and help women (re)enter the labour market, tackling gender-related differences in labour market participation have not figured prominently in government programmes. In particular, as long as the number of childcare facilities remains insufficient, the existing gender gap in labour market access (and thus its gender-specific segregation) will probably continue - to the detriment of women. (Georg Adam, University of Vienna)

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