Average minimum wage rates rise by 2.4% in 1996

On average, the minimum wage rates laid down by collective agreements rose by 2.4% in 1996. However, around 7.8% of employees are still estimated as being below the trade unions' minimum wage rate target.

Testing 1,2,3 Minimum wages in Austria are known as "collective agreement wages" because they are set by collective bargaining rather than by law, though it is unlawful to pay less than the collective agreement wage. Because of the large number of collective agreements concluded independently of each other, substantial variations in increases in the minimum wage can arise between industries or groups of employees. It is only possible to estimate the overall change of the minimum wage rate retrospectively. The annual estimate and the detailed monthly reporting are both carried out by the Central Statistical Office (Österreichisches Statistisches Zentralamt, ÖSTAT) based on reports received from the trade unions.

In 1996, minimum wage increases in the private sector were substantially higher than in the public sector (made up of civil servants including teachers, plus employees in public transport including public television). This continues a trend in evidence for most of the past 10 years, as is illustrated when the 1996 figures are calculated on the basis of an index where 1986=100. However, in April 1996 civil servants received an across-the-board, one-off payment of ATS 2,700 which is not taken into account in the minimum wage statistics. The table below sets out the 1995-6 increase in minimum wage rates for waged and salaried private sector employees, for civil servants and for public transport employees, and gives the 1996 figures on the basis of the 1986=100 index.

In the private sector, minimum wages for salaried employees, on average, rose less than those for waged employees, but this conceals substantial variations within both groups, as indicated by the table below, which gives the 1995-6 increase for specific sectors.

No doubt, the greater increase in industrial than in craft establishments reflects differential growth in productivity. Among waged employees, skilled workers (3.1%) did marginally better than unskilled workers (3.0%), and workers in production and services (3.1%) did far better than their counterparts in agriculture and forestry (2.4%).

Most collective agreements in 1996 were concluded for a duration of 12 months, but a number were made for only 11 months, or for longer periods - 13, 14, 15, 16, or 24 months.

Since the late 1980s, it has been a deliberate policy of the trade unions to ensure that minimum wages rise faster than actual wages. The aim is both to boost consumption by increasing the lowest incomes, and to achieve greater incomes equality. The original target was to raise all wage rates to such a level that workers in full time employment would earn at least ATS 140,000 gross per year, and was then raised to ATS 168,000 gross per year. Estimates for the Ministry of Labour, Health and Social Affairs (Bundesministerium für Arbeit, Gesundheit und Soziales, BMAGS), published in the annual Report on the Social Situation (Bericht über die soziale Lage) suggest that in 1995 240,000 employees - 7.8% of the total - still earned wages below the unions' target. Among female employees, the share was 12.2%, while it was only 4.6% among men. Foreign nationals are heavily overrepresented: one-sixth of all foreign employees were estimated as being below the target. One-fifth of all employees below the target are foreign nationals, while 31% of the total are men and 14% are women (a breakdown by industry was not available).