FES - Ideas - Madrid 8.2.2010 Eva Belabed1 Labour Relations in Austria Fundacion Ideas – Friedrich...

FES - Ideas - Madrid 8.2.2010 Eva Belabed 1

Labour Relations in Austria

Fundacion Ideas – Friedrich Eberth Stiftung

February 8, 2010 – Madrid

Successful Labour Relations in Europe: the German, Austrian and Danish Models


Labour Relations in Austria

Labour Relations (Sozialpartnerschaft)

Have contributed to make Austria one of the richestcountries in the world and still are an important pillar.

Have contributed to cope with challenges and to mitigate the impact of the crisis in Austria

But they are challenged by globalisation, new capitalism, and the subsequent shifts in power.

Confidence in Social Partners is (very) high.


Austria catches up …

Austria catches up and ranks high in Wealth, Growth and Competitiveness Living standards and quality of life Employment (relatively low unemployment) Public opinion: citizens satisfied, despite

concerns Attractiveness to others: migration, tourism,

business leaders..


… and faces (new) challenges

Globalisation and new capitalism lead to Increasing pressure on living and working conditions, On social protections systems, Public Services (privatizations), Rising inequalities…

And Austria faces (new) challenges The crisis => Jobs – jobs - jobs Rising inequalities, Education, Innovation, insufficient

R&D, Tax structure … Sustainable Growth Model


Catching up - Real GDP p.C. multiplies x 5


The Economy growsbut growth rates decrease


Unemployment rates are higher since the 1980s


Incomes grow a lot less since the 1980s


..and the wage share decreases Source: WIFO, Guger et al, Umverteilung durch den Staat in Österreich, 2009


Austria moves towards the Service Society


Tourism is an important sector


Austria is competitive and export share rises(Austria ranks 14th – 17th in WCR 2003 – 2010)


Taxes and Social Security Contributions grow…(Austria ranks 6th in EU on Social Protection Expenditure/GDP - Source: The Social Situation in the European Union 2009; EC February 2010)


..but expenditures (still) reflect high quality public services and have a strong redistributional impact Source: The Social Situation in the European Union 2009; EC February 2010, p.285


Life expectancy increases


… and population grows - at varying rates(Composition changes: older age-groups vs younger)


Very few strikes in Austria – except 2003


Austrians have varying degrees of confidence in institutions – with Chamber of Labour ranking first

Source: Market-Marktforschung, October 2008, Vertrauen ist ungleich verteilt http://www.vmoe.at/rte/upload/news_vertrauen_ist_ungleich_verteilt_.pdf


Austrians are more satisfied, confident and optimistic than Europeans on average

Source: Eurobarometer Nr. 72, December 2009: some contrast with other polls

Comparing Austria and EU: A EUSatisfied with life 85% 78%Satisfied ec. Situation 43% 23%Confidence Government 54% 29%Confidence political parties 36% 16%Austria: 2/3 see no impact of crisis on personal

situation 20% expect improvements


At the same time, they feel increasing pressure on their living and working conditions – esp. since the crisis

Index of Working Climate 2009 (Arbeitsklimaindex AKOÖ; www.arbeiterkammer.com)


Labour Relations in Austria - an important success factor

(Source: AK – Thomas Delapina, 2009, [email protected] and www.arbeiterkammer.at)

From Confrontation & Conflict to Cooperation and Consensus

Institutional setup How does it work? Key success factors The Social Partners – Recent

Agreements The Chambers of Labour Challenges ahead


Labour Relations in AustriaFrom Confrontation&Conflict to Cooperation&Consensus

Institutions created 19th / 20th century But lack of political and institutional conditions for

cooperation (class&group interests > common goals) Political and economic crises created a willingness

to cooperate and negotiate from 1945 on Guided by the principle of solving conflicts of

interest primarily at the negotiating table rather than through industrial action (strikes, lock-outs)

To ensure economic reconstruction and social equality in the postwar-period

Discussions and temporary setback 1980s – 1990s – 2003


Institutional Setup – The System

The Austrian System of Economic and Social Partnership

Works on different levels, based on different grounds (legal, voluntary, bargaining)

General level: The Austrian Social Partners Sectoral Level: Sectoral Unions and Federations

(Economic Chamber) Company Level: Works Councils and Management Aims: Strengthening Competitiveness and

stability, preserving and improving social standards and protecting the ecological bases of existence


Institutional Setup – The Social Partners

The Austrian Social Partners

The Economic Chamber (WKÖ)

The Chamber of Labour (BAK)

The Chamber of Agriculture (LKÖ)

The Austrian Trade Union Federation

(ÖGB)


How does it work – the Framework

The Institutions: Strong Participatory and Representative Democracy Strong, Independent, Representative Organizations Self-Governed (Elections) Chambers based on law

Multi-level cooperation and interaction: informal Voluntary historically grown between the organizations and with the government


How does it work – Basic Principles

Common long-term economic and social policy goals

E.g. growth of real incomes and wealth, social security, full employment, equal distribution of wealth, price stability ...

Dialogue, co-operation and co-ordinated action more beneficial for everybody than open conflict

No denying or ignoring of conflicts ... ... but seeking solutions and balance of interest

that benefit all participants


How does it work - Critical Success Factors

Culture and Political Will "... a special kind of discussion and

negotiation culture ... Trust, common goals, balance of interests Macro-economic perspective Compromise as a contribution to success ... the willingness to enforce compromises

internally as well as externally, and to represent different interests with due

regard to medium-term joint objectives and the overall interests of society ...„


Challenges for Social Partners- in Austria and Beyond

The International Dimension Globalisation and New Capitalism change the

logic and shift power This requires new approaches to corporate,

national and global governance Cross-border, European and international

cooperation need to be strengthened Social Partners and other stakeholders need to

be involved on all levels and in all organsations – including the international level

Building on existing cooperation, institutions and procedures: Cross-Border, EU-Social Dialogue, EESC, AICESIS,

The impacts of the crisis


How does Austria cope with the crisis ?Source: AK - Josef Wallner, 2010, [email protected]


Unemployment increases but is second-lowest in Europe (EU-method)Source Chart 6: EU Employment Situation and Social Outlook, Monthly Monitor, January 2010


… and is lower than OECD total

Unemployment (OECD Ec. Outlook, Nov. 2009 – Austria, Key Economic

Projections)


Austria’s fiscal balance deteriorates, but less than OECD total

Fiscal Balance (OECD Ec. Outlook, Nov. 2009 – Austria, Key Economic

Projections)


.. And inflation is lower, but positive in 2009

Inflation (OECD Ec. Outlook, Nov. 2009 – Austria, Key Economic Projections)


How does Austria fight the crisis?

Economic Stimulus Packages, Tax Reform and Wage increases (negotiations 2008, effective 2009) maintain 41.500 jobs and dampen increase in unemployment by 0,7%-points

Labour Market Packages I-II¹ maintain 45.000 jobs

Active Labour Market Policy²: 10.000 jobs Actions for young: 3.000 jobs Total: ~ 100.000 jobs³ Expenditure for PES: 2009 + 38,5%; 2010 + 3%1 Short-Time work, Part-Time for older workers, Solidarity bonus, Training leave New, EPU-Förderung2 Action 4.000, Sozialökonomische Betriebe, Employment Projects3 Calculations: WIFO – Sources: BMASK, AK-Josef Wallner 2010,[email protected]


Unemployment and Short-Time Work in Austria

Growth of Unemployment in selected Sectors compared to previous month Short-Time Work – Persons per Month (Source AK – Josef Wallner 2010, [email protected]) JD = Average 2009


And what is the Role of Labour Relations?

Social Partners involved on all stages Continuous and ongoing cooperation among social

partners and with government To identify common ground and win-win-situations Ongoing meetings on different levels (Presidents, SGs,

experts) continuously develop common positions which allow for quick action when necessary

E.g. « Ischler Dialog » - yearly conference of Social Partners where they issue a paper on a previously chosen issue, which is then negotiated with government. October 2010: employment and migration



Key: the culture of permanent and ongoing contact and cooperation which allows for continuous adjustment of positions and views

Results in common proposals such as: Social Partner Proposal « LM 2010 » in 2007

(before the crisis) Negotiations with Government resulted in: Extension of Training via PES (Public

employment Service) Youth Package (Education Guarantee for

Young – helps a lot in the crisis)



The Crisis Packages were negotiated in detail between the ministries

concerned and AK, ÖGB and WKÖ Bills were drafted after these negotiations In parallel Social Partners negotiated Short-time Work Government waited for results and included them in

the bill – taking into account budgetary restraints In addition: Social Partners are part of the Governing

Bodies of PES (Public Employment Service) Plus negotiations on company level: trade unions and

works councils – e.g. Short-time work needs an agreement on company level plus agreement by the sector union

The result is a compromise agreed upon and accepted by all participants


And what is the role of Labour Relations?

Short-time Work in Austria The instrument is very selective Wage compensation 90% - subsidized by PES Approval upon key elements (conditions), among

others: Employer contributes substantially to costs Agreement by social partners on company level plus

sector union Employers get: flexibilisation of short-working time,

PES pays employers contribution to social security Consequences: only sound companies can afford, they

only keep key people Effect: no adverse structural impact (cf OECD) Result: 30.188 persons expected (~10% of

unemployed) in 254 companies by 16.1.2010 (BMASK)


Why did Austria cope better with the crisis?

Austria ranks 14th - 17th in WCR Austrian banks were less exposed to toxic assets – although heavily engaged in CEE SMEs important part of the economy Unemployment rate low, Inequalities less accentuated (although increasing) with strong redistributional

impact of public expenditure Public budget almost balanced: 0,3% deficit


Why did Austria cope better with the crisis?

Consumption and investment held up better than exports - due to:

Wage increases negotiated 2008 – effective 2009 Tax reform effective 1.1.2009 Stabilizing employment via Short-time work and other

measures in the LM Packages Automatic stabilisers and monetary, financial, fiscal and

labour market policy measures (stimulus packages ….)


Labour Relations in Austria and the fight against Unemployment

Thank you!

FES - Ideas - Madrid 8.2.2010 Eva Belabed1 Labour Relations in Austria Fundacion Ideas – Friedrich...

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