Is persistently high inflation forcing the social partners to raise wages? Or is it precisely the high KV degrees that are fueling inflation? A heated debate has erupted over this chicken-and-egg issue of economic policy and the specter of the wage-price spiral. At the center of the excitement: ÖVP Finance Minister Magnus Brunner.
In the ORF “Report”, he said that the reasons for the high inflation are “definitely the high wage settlements”. Austria has the highest diplomas in the EU with Belgium, “of course that drives inflation”. Each percentage point wage increase raises inflation by 0.3 percentage point. Criticism comes from the green coalition partner, from SPÖ, FPÖ, trade union and science.
“We don’t have that this year, nor next year”
In any case, economic researcher Gabriel Felbermayr (Wifo) does not see a wage-price spiral in Austria: “In 2022, this year, we will not have one and next year either.” KV negotiations use the so-called Benya formula – as it has been applied since the 1960s – wages and salaries are always indexed to the past. “Everyone understands the term differently,” says Felbermayr succinctly.
The economic forecast presented by Wifo and IHS on Wednesday: Continued high inflation, virtually no economic growth
Maurer: “Don’t let the population vote to accept lower wages”
Green club president Sigrid Maurer said immediately after Brunner’s “Report” interview in “ZiB 2” that his thesis contradicted the scientists’ statements. Given the high inflation, it is also “inappropriate” to tell the population to accept lower wage agreements. As a politician, you leave wage negotiations to the social partners.
Trade union: “In the ÖVP’s worldview, higher wages are a bad thing”
Union member Barbara Teiber picked up the ball: “The government would do well not to get involved.” In the “ÖVP worldview”, higher salaries “apparently are a bad thing, while higher profits are always a good thing”. Support comes from the SPÖ: “Higher wages are the result, not the cause, of inflation,” said club president Philip Kucher. In Brunner he finds “blatant cynicism or incredible ignorance of economic policy”.
Kickl: ‘No feeling for the people at all’
For FPÖ leader Herbert Kickl it is also clear: “The black finance minister has no feeling for the people at all.” Kickl argued on Wednesday for a price brake, far-reaching tax cuts on basic foodstuffs, energy and fuel and an immediate end to sanctions against Russia.
“You have to see the whole”
It was “of course a misunderstanding,” Brunner said Wednesday in response to questions about the cabinet. He tried to explain various reasons for the high inflation – such as the energy costs in the long-term energy contracts in this country, the composition of the shopping basket and also the high wage agreements. “You have to see the whole.”
Source: Krone
I am Ida Scott, a journalist and content author with a passion for uncovering the truth. I have been writing professionally for Today Times Live since 2020 and specialize in political news. My career began when I was just 17; I had already developed a knack for research and an eye for detail which made me stand out from my peers.
