Austria: White-collar union campaigns to increase the minimum wage

The white-collar union GPA-djp has called for a gross monthly minimum wage of €1,700 for full-time work to be implemented in all (sectoral) collective agreements.

Both Austria’s Federal Finance Minister, Hans Jörg Schelling, and the President of the Federal Economic Chamber (WKO), Christoph Leitl, have claimed that in many cases unemployment benefits would be almost as high as employment incomes (or benefits from the means-tested minimum income plus transfer benefits), thus not providing enough incentives for those who are unemployed to take up work. These statements were strongly criticised by Wolfgang Katzian, Chair of the white-collar Union of Salaried Employees, Journalists and Graphical Worker (GPA-djp), Austria's largest union, who in turn has made a call to raise the collectively agreed gross monthly minimum wage to €1,700.

In early December 2015, the GPA-djp held a campaign week raising awareness among the public of the union’s objective. Currently, the collectively agreed gross monthly minimum wage lies at around €1,500 in most collective agreements, corresponding to a net income of €1,161, which is around the definition mark of the threshold for poverty risk; however, according to the union, about 12% of all full-time workers (270,000 employees) still earn less. In sectors like newspaper delivery, hairdressing, floristry or passenger transportation, the monthly minimum wage lies below €1,200. Overall, almost 800,000 employees would benefit from the increase, including part-time workers.

Under Austria's recent tax reform, which took effect from 1 January 2016, a gross monthly income of €1,700 corresponds to a net income of €1,311 which would be an essential prerequisite for a self-determined life, according Mr Katzian. Female employees, in particular, would benefit from an increase in the minimum wage. While less than 9% of full-time male employees earn less than €1,500 (gross) a month, this holds true for 18% of full-time female employees. In addition, increasing minimum wages would be a step towards closing the large gender pay gap, as employees working part time (the vast majority of whom are women, often working in low-wage sectors) would also benefit from an increase; their hourly wages lie about 22% below that of full-time workers.

According to calculations by the liberal think-tank Agenda Austria, the state would be the major beneficiary of such a wage increase (due to employees' social security contributions). Mr Leitl of the WKO has qualified those claims as too excessive and an attack on the autonomy of collective agreements. His colleague Martin Gleitsmann, Head of the WKO’s Social Policy Division, has warned that excessive wage increases would jeopardise jobs and that the union’s claims would go beyond the reality of the Austrian labour market. In some sectors, a minimum wage of €1,700 has already been implemented, while in other sectors an increase would be an economic burden.

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