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Unemployment in Austria remains low despite high inflation pressures

Austria's labour market is holding up against high inflation as the number of people out of work hits a 14-year low.

Published: 2 November 2022 16:44 CET

Unemployment in Austria remains low despite high inflation pressures

Unemployment in Austria has hit a 14-year low despite rising inflation. (Photo by Pixabay / Pexels)

The official unemployment rate in Austria is just six percent, according to new figures from the Public Employment Service (AMS).

This is the lowest unemployment figure for 14 years and shows the labour market is withstanding the current inflationary pressures, reports ORF.

At the end of October, 319,232 people were out of work or in training in Austria – around 22,000 less than one year ago, and 35,000 less than in the pre-pandemic year of 2019.

FOR MEMBERS: How expensive are gas and electricity in Austria right now?

Johannes Kopf from AMS said the results point to “a few more months of joy” and referenced a strong construction market as one of the reasons for such low figures.

Unemployment in industry is currently down by 12 percent and job losses in trade have reduced by 10 percent. In hospitality and gastronomy, the number of people registered as unemployed only dropped by one percent, but in the area of temporary work, the rate was down by 14 percent.

In October, the number of job vacancies across the country was up by 10 percent when compared with October 2021.

READ ALSO: Six official websites to know if you’re planning to work in Austria

Additionally, long-term unemployment in Austria has almost halved since its peak in April 2021 when 148,436 people were registered as long-term unemployed. There are currently 78,201 people in this category.

The reduction in short-time work across Austria as companies recover from the pandemic lockdowns has also contributed to the low unemployment figure.

A flash estimate by Statistics Austria put the inflation rate for October at 11 percent. The high rate is being driven by rising global energy prices.

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What you should know about collective agreements if you work in Austria

Foreigners in Austria—a country well-known for its high quality of life—might be surprised to hear that the Alpine Republic does not have minimum wage laws. Instead, salaries and many other labour law provisions are regulated by the so-called “Kollektivverträge,” or collective agreements.

There are over 800 collective agreements in Austria, and the trade unions negotiate over 450 collective agreements every year. These agreements, which cover almost all Austrian employees (approximately 98 percent), provide a reassuring level of protection. They guarantee minimum standards and legal security in employment relationships, ensuring that your rights and conditions are safeguarded.

What are these agreements?

According to the Labour Relations Act, agreements are made between statutory interest groups of employers and employees. They are independent of their negotiating partners and regulate working conditions. In general, these include the Chambers of Labour, which are public-law corporations representing the interests of employees, and representatives of employees and the Austrian Economic Chamber, which is representative of employers.

READ ALSO: Is it time Austria introduced a minimum wage?

In addition, the Federal Conciliation Office at the Federal Ministry of Labour and Economy can also officially recognise the capacity to conclude collective agreements of voluntary professional associations of employers and employees and certain other associations, including significant unions such as Vida.

Both employers and employees cannot choose whether or not to join these chambers, as membership is automatic, and a levy (“Kammerumlage”) is collected to finance the interest groups.

Collective agreements generally apply to an entire economic sector, so you’ll see them being negotiated among metal workers and companies, for example. But they can also apply as specific company agreements (or both: your company might have a collective agreement with its workers and also be subject to a sector agreement).

What else is negotiated in them?

Collective agreements also regulate other essential labour law provisions (such as arrangements regarding pay, flexible working hours, vacation rights, special payments such as vacation and Christmas bonuses) and the termination of the employment relationship), in addition to the minimum wage.

The collective agreement aims to establish appropriate wage and working conditions for the largest possible number of employees and for all sectors and regions. Some things that are regulated by collective agreements (for example, the special payments, known as the 13th and 14th salaries in Austria) are so common among different sectors that they are often mistaken for national laws and policies.

READ ALSO: Six things you need to know about salaries in Austria

How are the agreements negotiated?

Deals are also concluded between the two parties, often when trade unions make demands and call for negotiations—with most sectors, this happens yearly.

In order to conclude a new collective agreement or amend an existing one, the negotiating partners must reach an agreement on its content. There are often several rounds of negotiation, and workers can use tools such as strike actions in the process.

Where can I find them?

Each profession usually has its own collective agreement, and knowing where to find them is essential. For instance, you’ll often see that job ads in Austria don’t have a salary announced (by law, they have to) but something along the lines of ‘payment according to the collective agreement’. This is true for a wide range of professions, from healthcare workers to construction workers, from teachers to IT professionals.

If you want to find out the minimum wage you’ll get, you can check your collective agreement for your sector or profession HERE.

READ NEXT: When can I take my holidays after starting a new job in Austria?

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