The government wants to reduce the costs that employers pay. According to the Chamber of Commerce, there is actually no room for maneuver for this.
Part of the new anti-inflation package is the “power factor relief”. In concrete terms, additional wage costs will be reduced by 0.3 percentage point from 1 January 2023: the accident insurance premium will fall by 0.1 percentage point, and the contribution to the family expenses fund (FLAF) by 0.2 percentage point. This should yield an annual aid volume of 450 million euros.
Of course, indirect wage costs are not paid by the employees, but by the employers. On average, the mark-up on gross wages for companies is currently 29.66% (see chart below). But how much of the future savings the companies will pass on to their employees is unclear.
The term itself is misleading
For Sybille Pirklbauer, head of social policy at the Vienna Chamber of Labour, the term “non-wage costs” is misleading in itself: “There is nothing incidental about it, because it is about financing the core services of the welfare state. “That is why the term “state social contributions” would be more appropriate.
These contributions include accident, health, unemployment and pension insurance. On the other hand, there is the employer’s contribution to the FLAF (which finances services such as child benefit, childcare allowance, free travel for school children, school books, etc.), the guarantee contribution in the event of insolvency, which regulates the payment of wages in bankruptcy, housing subsidies and municipal taxes, which nurseries, local public transport, etc. are financed.
According to Pirklbauer, there is really no room for maneuver as the premiums at the FLAF, the guarantee fund for insolvency payments and the accident insurance have already been cut in recent years. On the contrary, accident insurance would require more money for prevention.
She does not agree with the argument that high non-wage costs would make the country less competitive. Since the Austrians are highly productive, unit labor costs (see chart above) in domestic production are even lower than in many other countries.
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.
