The economically liberal think tank Agenda Austria is concerned that wages in Austria are rising too much. As a result, domestic companies would lose their competitiveness. The collective labor agreement increases would already amount to about 8.5 percent this year.
In the euro area, the average is only 4.6 percent. The difference is due to inflation, as the higher wages are based on the average inflation rate of the past twelve months. According to Agenda Austria, this is not tackled so consistently in any other European country. At the same time, Austrian inflation is currently higher than the eurozone value. In May the values were 3.4 (Austria) and 2.6 percent (Euro area).
“Stagnant productivity”
Since last year, collective wages in this country have risen almost twice as fast as in the eurozone, the economic liberal institute reports. The team refers to figures from the Austrian National Bank and the European Central Bank.
There are “serious consequences” because Austria is losing its competitiveness due to soaring unit labor costs and stagnant productivity. “Austria must slowly consider whether the way in which wages are determined should be brought into line with that of competing countries. The domestic business location has always been determined by quality, but in the long term we will not be able to afford higher wages than our direct competitors,” says Franz Schellhorn, Director of Agenda Austria.
In the international ranking of the Lausanne business school IMD, Austria recently placed 26th out of 67 countries evaluated.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
