ILO-Global Jobs Pact and Employment Policies in Austria€¦ · I.d) A Global Jobs Pact (June 2009)...

Johannes Schweighofer

ILO-Global Jobs Pact and

Employment Policies in Austria

Study visit of Trade Unionists from Ethiopia, Ghana, Kenya,

Malawi, Mauritius, Mozambique, Namibia, Sirra Leaone, Swaziland,

Zambia, Zimbabwe at the Austrian Trade Union Confederation

(ÖGB)

Vienna, 21 March 2011


Vienna, March 2011 2

Overview

I. What says the ILO-Global Jobs Pact?

II. Austrian Crisis Measures: a Big Package!

III. Austrian Labour Market and Employment Policies

IV. Social Security and Social Safety Net in Austria

(compared to Developing/African Countries)

V. Austrian-Keynesianism and Social Partnership

VI. Poverty (Millenium Development Goals) and

Informal Economy: Here and There!



My MAIN MESSAGES

What makes the difference for labour market

performance?

I.Political will to keep unemployment low!

II.Institutions matter!

III.GDP-Growth – a necessary, but not a sufficient

condition for fair growth!

IV.Piecemeal engineering/muddling through/trial and

error - better than „systematic approach“?!

V.Poverty: similarities, but many substantial differences

VI.Do we live in the same world?!



I.a) Recovering from the Crisis:

A Global Jobs Pact (June 2009)

Adresses the social and employment impact of the

financial and economic crisis; productive recovery

centered on investments, employment and social

protection; decent work opportunities; job centered

policies; worldwide action: national, regional, global?

Generating employment, extending social

protection, respecting labour standards, promoting

social dialogue, shaping fair globalisation;

Implementation? Impact? Mutual learning!



I.b) Recovering from the Crisis:

A Global Jobs Pact (June 2009)

The ILO-Global Jobs Pact had NO SIGNIFICANT

IMPACT ON AUSTRIAN ECONOMIC POLICIES!

Generating employment: Broad political consensus

in Austria!

Extending social protection?! in AUT - not really (Re-

placement Ratios in UI, Care, Pensions)!

Respecting labour standards (see ILO Decent Work

Country Profile Austria - below)

Promoting Social Dialogue: Transferability?

Fair Globalization: Tobin Tax (on financial transactions)

– Global Competition for Jobs/Prosperity



I.c) A Global Jobs Pact (June 2009)

Employment Preference

0,0

10,0

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Employment Rate in European Countris (2009)

Source: Eurostat



I.d) A Global Jobs Pact (June 2009)

Employment Preference

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Unemployment Rate in Western Countries in 2010 (2009)



II.a) Financial Crises - Austria

Historic Downturn of Austrian Economy (-3,9% of

GDP, -1,4% dep. Employment, +22,6% Unemployed)

Co-ordinated Stimulus Package in Austria (Makro

and Mikro) and in the EU

Imported Crises (Financial Market Turbulances)

Very unusual reaction pattern of Austrian Economy

(no hysteresis effects)

Unemployment Rate: 3,8% (2008) – 4,8% (2009)

Employment Rate: 72,1% (2008) – 71,6% (2009)

Piecemeal Engineering – Trial and Error!



II.b) Financial Crises - Austria

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Volatility of Unemployment: Change to same Month in Previous Year 06/1990 -1/2011

Source: PES Austria


Vienna, March 2011

10

II.c) Financial Crises - Austria

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Unemployment Rate Development July 2008-July 2010



II.d) Financial Crises – General Measures

Economic Stimulus Package I: approx. € 1 billion

Financing for SME and infrastructure measures

Economic Stimulus Package II: approx. € 2 billion

“Investment Campaign” (a.o. regional employment

programmes amounting to € 150 million)

Tax reform amounting to € 2.7 billion

in order to encourage demand and boost purchasing

power

= Altogether more than 2% of the Austrian GDP



II.e) Financial Crises - Austria

Record budget for active labour market policy in

2010: some € 2,1 Billion/0,75% of GDP (active) and

€ 3,3 Billion/1,2% of GDP passive LMP

Increase of AMS staff by 200 (about 5%) to 4,680

Labour Market Package I: revision of short-time

working scheme, focus on high-quality qualification

Labour Market Package II: reforms of short-time

working (relaxing criteria), part-time allowance scheme

for older workers, educational leave and solidarity

premium model, establishment of a youth foundation

Labour Market Package III: further education for

women and youth



II.f) Financial Crises - Austria

0

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Real Expenditures on Active Labour Market Programmes andUnemployment Rate 1974-2010

IAMP1real

IAMP2real

IAMP3real

IALQ

IAMP1real: Aktive + Aktivierte (Qualifizierung, ATZG) + JASG + KUA

IAMP2real: Aktive + Aktivierte Qualifizierung + JASG (ohne ATZG, ohne KUA)

IAMP3real: Aktive (ohne KUA) + JASG

UR 2010: 6,9%

Total Expentidures on aLMP 2010: 0,86% of GDP



II.g) Financial Crises - Austria

Expenditures

for active

Programmes

in % of GDP

per %point

UR



II.h) Financial Crises - Austria

•

•

Short time working scheme2009: 66.000 effektiv Kurzarbeitende (durchschnittl. Ca. 26.000; ca. 20% Frauen) in300 Betrieben; 113 Mio. € , durchschnittl. 24% AZ-Reduktion (13 Mio. Stunden von 5,6Mrd., 0,25% AZ-Reduktion)

578

4.296

7.287

11.338

15.631

21.345

37.087

32.401

35.478

32.16534.314

26.019

22.19720.93420.832

17.083

11.78211.007

7.8796.590

3.5651.730

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Plan TeilnehmerInnen*

Bestand TeilnehmerInnen (Ende August 2010 abgerechnet)**

Participants in Scheme: Stock 0,7% of total Employment



II.i) Financial Crises – Short Time Working

Subsidized temporary reduction of working time

(10-90%), in companies suffering from transitory eco-

nomic difficulties

• 2007: average of 42 persons working short-time, 2008: 798

• Peak in April 2009: more than 37,000 persons working

short-time

Reform of short-time working

• Extended eligibility criteria (all employees except

apprentices)

• Prolonged maximum duration (up to 24 months)

• Increased financial support

• Combination with qualification measures possible



III.a) Austrian Employment Policies

Key Features

• High Employment Rates (more den 70% of 15-64 year

old are either self or dependent employed)

• Low unemployment rates for a very long time (around

4%, LFS-ILO-Standard)

• High Labour and Job Turnover Rates

• Keeping youth unemployment rates low (€ 500-2009)

• Active LMP – not too active: 60% of Expenditures go

to qualification measures

• Passive LMP – not too generous: some 60% net-

replacement ratio; benefits according to work history

•



III.b) Austrian Employment Policies

Unemployment benefit

• Amount: basic amount of 55% + family supplements

+ additional supplements (eg: minimum income € 1000 – net €

800; unemployment benefit: 480€; average benefit: some € 800)

• Eligibility: unemployment, availability for job placement, ability to

work, willingness to work, compliance with eligibility criteria,

period of claim not yet exhausted

• Duration: 20 / 30 / 39 / 52 weeks

(depending on insurance period and age)

Unemployment assistance (means-tested)

• Requirements: claim for unemployment or transition benefits is

exhausted, financial distress and availability for placement

• 92% resp. 95% of UB basic amount + family supplements

• Assessment of partner income


Vienna, March 2011

III.c) Active Labour Market Policy Measures

• Employment:- Integration subsidies (EB)

- Socio-economic enterprises and job schemes in the non-profit sector (SÖB, GBP)

- Short-time work (and qualification) (KUA)

- Solidarity premium (SOL)

- Subsidies to single-person businesses (EPU)

• Qualification:- Labour foundations (AST)

- Professional mobility (active job-search, orientation, qualification, training) (BM)

- Allowances for training course costs and ancillary course costs (KK, KNK)

- Training of employees (QFB)

- Subsistence allowance (DLU)

- Youth programmes

• Support Measures:- Counselling and guidance centres (BBE)

- Childcare subsidies (KBH)

- Business start-up programme and subsidies (UGP, GB)

- Geographical mobility (job interview grants, distance & relocation subsidies)



III.d) Austrian Employment Policies



III.e) Austrian Employment Policies

0

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4

6

8

10

12

Un

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ate

Unemployment Rate in the long Perspective: AUT-GER-EU15-USA

EU15

Germany

Austria

USA

Source: EU-AMECO-Database



III.f) Austrian Employment Policies

Labour Market Flows in Austria 2010

Dependent

Emplyoment

Stock UB

12/2009

3.299.000

Self Employed

Stock SB

12/2009

410.000

Dependent

Employment

Stock UB

12/2010

3.344.000

Self Employed

Stock SB

12/2010

416.000

PES-Registered(Unemployed,

Qualification)

Out of Labour

Force

280.000

37.000

37.000

2.000

41

9.0

00

33

8.0

00

716.000

16.400

560.000

36.600

458.000

39.000

12.000

771.000

Source: PES DWH Erwerbskarrierenmonitoring, Hauptverband der Sozialversicherungsträger; Stand der Daten 16.03.2011;

gerundete Werte



III.g) Austrian Employment Policies: Youth

Unemployment Rates (Sept 2010)

Source: Eurostat



III.h) Austrian LMP

• Labour market administration outsourced from the

Federal Ministry in 1994 and incorporated as Public

Employment Service AMS ( = “Arbeitsmarktservice”)

• Functions:

• Private-sector functions (counselling, placement

and support services)

• Official functions (unemployment insurance,

employment of foreigners)

• Labour Minister sets overarching objectives in

accordance with the Social Partners



Public Employment Service (AMS)Federal Head Office

Provincial

Office 1

Provincial

Office 8

Provincial

Office 9

Provincial

Office 6

Provincial

Office 2

Provincial

Office 3

Provincial

Office 5

Provincial

Office 4

Provincial

Office 7

Regional

Branch

Offices

Regional

Branch

Offices

Regional

Branch

Offices

Regional

Branch

Offices

Regional

Branch

Offices

Regional

Branch

Offices

Regional

Branch

Offices

Regional

Branch

Offices

Regional

Branch

Offices

III.i) Austrian LMP: Organisational Structure

Federal Ministry of Labour, Social Affairs

and Consumer Protection

101 regional offices + 2 branch offices, 63 career information centres

Overarching Objectives

III.j) Hierarchy of Labour Market Policy Objectives

Overarching Objectives by the Federal Minister

LMP Annual Objectives

AMS Balanced Scorecard

Active LMP Budget

(proportion for women: 50%)

Work Plan of Provincial

and Regional Offices

AMS Long-Term Plan

EU: Integrated Guidelines, European Employment

Strategy – National Reform Programme

Labour Market Policy

November 2010 26



IV.a) Social Security – Safety Net in AUT

Sickness and Maternity (7,1% of GDP)

Work injury: 99% of population is covered

Old age and disability pension (15,5% of GDP)

Unemployment (1,4% of GDP)

Family benefits (2,8% of GDP)

Social Assistance-Means tested guaranted minimum

income (€ 753, incl.dwelling costs for single – poverty

threshold– 60% of median income = € 994 in 2008)

Labour Law (severance payments, notice periods)

Overall Expenditures: 27,3% of GDP in 2008 (almost

30% in 2009)



IV.b) Social Security – Safety Net Globally



IV.c) Social Security Expenditures – Developing

Countries



IV.d) Social Security–Contribution Rates in AUT



IV.e) Social Security – Globally



IV.f) Social Security – Current Discussions

in Austria

Extending social protection in AUT during crisis -

not really:

# Increase in re-placement ratios in UI – denied

(trade union request during crisis)

# care for elderly

# old age pensions and health insurance face

severe financial constraints (older people are more

often sick; disability pension – average age of

retirement: 52 years; old age pension: 57,5 female

/58,9 male (statutory pension age: 60/65; life

expectancy: 81 female/78 male)



IV.g) Social Security – Safety Net AUT

Respecting labour standards - see ILO Decent Work

Country Profile Austria:

+ Achievments in recent years: Incresing labour force

participation of women and elderly; decreasing

poverty of employed (6% working poor), more

social protection for atypical workers (part-time,

temporary workers, marginal employed, free lancers,

etc.) and a better work-life-balance;

- Problem areas: atypical work forms which do not

provide minimum income, more low wage earners

(12,7% earn less than 2/3 of median income),

segmented labour market (employment stability),

labour market integration of foreigners



V.a) Austro-Keynesianism and Social

Partnership in Austria

What is „Austro-Keynesianism“? (1)

• Concept was developed in the 1970s

• From „welfare-state oriented corporatism“ (1960-

1990) to „competition-oriented corporatism“ (1990-

2010)

Main Features

• Broad political consensus – fight against (youth)

unemployment!

• Consensus: Markets do NOT provide full employment

in all circumstances! Deficit spending! Eclectic and

pragmatic approach! Stabilize expectations of

economic agents!



V.b) Austro-Keynesianism and Social

Partnership in Austria

What is „Austro-Keynesianism“? (2)

• Stabilize inflation through „hard currency strategy“

(DM anchor) – wage restraints – macroeconomic

orientation; appreciation of Austrian Schilling wipes

out unproductive sectors („Strukturpeitsche“) – Austria

has no problems to participate in EURO-area!

• Take income distribution as given – „maximise the

cake“=GDP growth!

• Trade unions and Employer Organizations face a

situation of „repeated games“ (do not cheat!)



V.c) Austro-Keynesianism and Social Partnership in

Austria



V.d) Austro-Keynesianism and Social Partnership in

Austria

What is Social Partnership?

• „Corparatism“ means „extremly broad participation

of social partners i.e. trade unions and employer

organisations in decision making of all relevant

economic policy areas (fiscal, monetary, education,

• Autonomy of Social Partners in the field of wage

policies (collective aggreements)

• Precondition: Strongly centralisied organisations on

both sides

• Results: extremly rare cases of strikes

• Aiming for compromise, compromise, compromise

• Muddling through – Trial and Error – Going forth

and back



V.d) Austro-Keynesianism and Social Partnership in

Austria

-1,2

-2,2

-1,8

-0,8-0,6

-2,1

-0,9

-1,5

0,1

-2,6

-0,9-0,7

-1,2

-0,4

4,8

-3,0

-2,0

-1,0

0,0

1,0

2,0

3,0

4,0

5,0

6,0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Income Distribution in Austria (whole economy)Benya-Formel: dwages=inflation+dproductivity

Infl+Prod_Gesamt Löhne/Gehälter_Gesamt Umverteilung weg von AN



V.e) Austro-Keynesianism, Social Partnership

100,0

110,0

120,0

130,0

140,0

150,0

160,0

1991 2000 2005

Dependent Employed: from1991

1.Dezil-Mittel 2.Dezil-Mittel 3.Dezil-Mittel



10.Dezil-Mittel Inflation

100,0

120,0

140,0

160,0

180,0

200,0

220,0

240,0

260,0

280,0

1983 1991 2000 2005

Dependent Employed: from1983




10.Dezil-Mittel Inflation

Source: Guger et. al. (2009) Source: Guger et. al. (2009)



VI.a) Poverty and Informal Economy: Here …



VI.b) Poverty and Informal Economy: … and there



VI.c) Poverty … there: The Millenium Goals

Source: The MDG-Report 2010 Source: The MDG-Report 2010



VI.d) Poverty … there: The Millenium Goals

Source: The MDG-Report 2010Source: The MDG-Report 2010



VI.e) Poverty – here in Austria

Poverty-Definition in Austria (according to EU-SILC,

houshold diposible income+transfers): 60% of Median

Houshold Per Capita-Income (equivalence-based; 1.

person=1, next person=0,5, next child=0,3) - at risk of

poverty (income poverty)

Treshold: € 994 monthly/11.932 yearky for single

person, € 2087/25.056 two adults+two children

12% of Austrian = 993.000 persons

Absolute poverty (+income poverty): cannot afford

heating home, and extra costs, payments delay, go to

doctor, no clothings, 6%= 488.000 persons

Social Transfers (including pensions) reduce poverty

rates from 43% to 12%



VI.f) Poverty – here in Austria



VI.g) Poverty – here in Austria



VI.h) Poverty – here in OECD-countries



VI.i) Poverty – here in OECD-countries

Source: Employment Outlook, Chapter 1 (forthcoming)



VI.j) Poverty and Informal Economy: Here and there

0

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100

0

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10000

15000

20000

25000

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Poverty and Income Levels

GDP per Capita(PPP, 2010)

Populaton belownational poverty line (in %)

Source: CIA Factbook



VI.k) Poverty and Informal Economy: Here and there



VI.l) Poverty and Informal Economy: Here and there



VI.m) Poverty and Informal Economy: Here and there



VI.n) Poverty and Informal Economy: Here and there

0,0

10,0

20,0

30,0

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60,0

70,0

Shadow Economy

Source: Schneider et. al. 2006)



VI.o) Poverty and Informal Economy: Here and there

0

10

20

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60

70

80

90

100

Labour Force in Agriculturein % of total Labour Force

Source: CIA factbook and ILO



VI.p) Poverty and Informal Economy: Here and there

0

10

20

30

40

50

60

70

80

90

100

Unemployment Rate(latest figure)

Source: CIA Factbook and ILO



VI.q) Poverty and Informal Economy: Here and there

0

10

20

30

40

50

60

70

80

Gini-Index - Family Income

Source: CIA Factbook and ILO



VI.r) Poverty and Informal Economy: Here and there

Source: CIA Factbook



Thanks for attention!

[email protected]

ILO-Global Jobs Pact and Employment Policies in Austria€¦ · I.d) A Global Jobs Pact (June 2009)...

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Transcript of ILO-Global Jobs Pact and Employment Policies in Austria€¦ · I.d) A Global Jobs Pact (June 2009)...