The economy is currently growing strongly and the number of unemployed people in Austria is well below last year’s level. But October will show whether unemployment will rise more strongly than usual for the season. The forecast for 2023, which is still 1.5 percent economic growth, is probably not going to be released, Minister of Labor and Economy Martin Kocher (ÖVP) expects. Because “you are already seeing stronger clouds,” he told journalists on Tuesday.
Austria’s economic growth is still above the EU average and if we compare the situation in the current week with the same week last year, the country is in better shape. But current energy price hikes are “threatening” to both households and businesses, Kocher said. Therefore, work is now underway on an energy cost subsidy for companies. This is due to EU rules for “energy-intensive companies” whose energy costs account for more than three percent of turnover. The amount of the subsidy is then linked to the increase in energy costs – the details are still under negotiation.
Kocher assumes that “tens of thousands” of companies will benefit from a subsidy – such as factories, transport companies or hotels with saunas. From Kocher’s point of view, the decoupling of electricity and gas prices would be even more important. But this has to be done at EU level. Kocher wants a fixed price for gas for electricity generation. If the market price for gas is higher, the gas for the power generators should be subsidized accordingly. This would automatically limit the price of electricity and give companies planning certainty. “I think that would be the optimal solution,” says Kocher, because the price peaks in electricity production are eliminated and the market mechanism remains.
NEOS: “Cosmetic reduction” in non-wage costs
Kocher also calculated that it has been decided for companies in Austria to reduce non-wage labor costs by 0.4 percentage points – by the beginning of 2023 this should be only 3.7 percent. He sees this as a “signal for wage negotiations” – it creates space for conversations between employers and employees. The cuts in non-wage labor costs would “not quite” amount to a billion euros, but would go “in that direction”. The industry association praised the cuts as a “sensible step” to be followed by others. For NEOS, the measures are just a “cosmetic reduction”. Non-wage labor costs should immediately be reduced to the OECD average.
Talks about unemployment insurance reform are currently intensely underway, with talks at all levels “almost daily,” Kocher said. The possible stages in the level of unemployment benefits, opportunities for extra income, but also the measures of active labor market policy are controversial. In any case, it is about long-term structural changes that will take effect in the summer of 2023 at the earliest and not about crisis intervention.
Labor market: “Surprisingly good”
According to figures from the Ministry of Labor, 300,547 people are currently out of work, of whom 235,073 are unemployed and 65,474 in training. That means there are 8,884 fewer people in the stats than at the end of August. The number of training sessions has increased considerably in the past two weeks and Kocher expects a further increase after the summer holidays. 5943 people are pre-registered for short-time working, slightly less than last month. The labor market situation is “almost surprisingly still very good,” says Kocher. The great uncertainty in the economy has not yet had an impact. On the one hand, companies knew from the corona crisis that they had to keep their qualified employees. On the other hand, there are still reserves from the very good first half of the year.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
