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Labour Relations in Austria

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)

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Labour Relations in Austria

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  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 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  2. Labour Relations in Austria Labour Relations (Sozialpartnerschaft) • Have contributed to make Austria one of the richest countries 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. FES - Ideas - Madrid 8.2.2010 Eva Belabed

  3. 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.. FES - Ideas - Madrid 8.2.2010 Eva Belabed

  4. … 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 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  5. Catching up - Real GDP p.C. multiplies x 5 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  6. The Economy growsbut growth rates decrease FES - Ideas - Madrid 8.2.2010 Eva Belabed

  7. Unemployment rates are higher since the 1980s FES - Ideas - Madrid 8.2.2010 Eva Belabed

  8. Incomes grow a lot less since the 1980s FES - Ideas - Madrid 8.2.2010 Eva Belabed

  9. ..and the wage share decreases Source: WIFO, Guger et al, Umverteilung durch den Staat in Österreich, 2009 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  10. Austria moves towards the Service Society FES - Ideas - Madrid 8.2.2010 Eva Belabed

  11. Tourism is an important sector FES - Ideas - Madrid 8.2.2010 Eva Belabed

  12. Austria is competitive and export share rises(Austria ranks 14th – 17th in WCR 2003 – 2010) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  13. Taxes and Social Security Contributions grow…(Austria ranks 6th in EU on Social Protection Expenditure/GDP - Source: TheSocial Situation in the European Union 2009; EC February 2010) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  14. ..but expenditures (still) reflect high quality public services and have a strong redistributional impactSource: TheSocial Situation in the European Union 2009; EC February 2010, p.285 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  15. Life expectancy increases FES - Ideas - Madrid 8.2.2010 Eva Belabed

  16. … and population grows - at varying rates(Composition changes: older age-groups vs younger) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  17. Very few strikes in Austria – except 2003 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  18. 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 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  19. 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 EU Satisfied 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 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  20. 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) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  21. Labour Relations in Austria - an important success factor (Source: AK – Thomas Delapina, 2009, Thomas.DELAPINA@akwien.at 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 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  22. 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 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  23. 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 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  24. 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) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  25. 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 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  26. 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 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  27. 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 ...„ FES - Ideas - Madrid 8.2.2010 Eva Belabed

  28. 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 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  29. How does Austria cope with the crisis ? Source: AK - Josef Wallner, 2010, Josef.WALLNER@akwien.at FES - Ideas - Madrid 8.2.2010 Eva Belabed

  30. Unemployment increases but is second-lowest in Europe (EU-method)Source Chart 6: EU Employment Situation and Social Outlook, Monthly Monitor, January 2010 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  31. … and is lower than OECD total Unemployment (OECD Ec. Outlook, Nov. 2009 – Austria, Key Economic Projections) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  32. Austria’s fiscal balance deteriorates, but less than OECD total Fiscal Balance (OECD Ec. Outlook, Nov. 2009 – Austria, Key Economic Projections) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  33. .. And inflation is lower, but positive in 2009 Inflation (OECD Ec. Outlook, Nov. 2009 – Austria, Key Economic Projections) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  34. 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-Förderung 2 Action 4.000, Sozialökonomische Betriebe, Employment Projects 3 Calculations: WIFO – Sources: BMASK, AK-Josef Wallner 2010,Josef.WALLNER@akwien.at FES - Ideas - Madrid 8.2.2010 Eva Belabed

  35. 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, Josef.WALLNER@akwien.at) JD = Average 2009 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  36. 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 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  37. And what is the Role of Labour Relations? • 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) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  38. And what is the Role of Labour Relations? 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 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  39. 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) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  40. Why did Austria cope better with the crisis? • Austria ranks 14th - 17th in WCR • Austrian bankswerelessexposedtotoxicassets – althoughheavilyengaged in CEE • SMEs importantpartoftheeconomy • Unemployment rate low, • Inequalitieslessaccentuated (althoughincreasing) with strong redistributionalimpactofpublicexpenditure • Public budgetalmostbalanced: 0,3% deficit FES - Ideas - Madrid 8.2.2010 Eva Belabed

  41. Why did Austria cope better with the crisis? • Consumption and investmentheld up betterthan exports - due to: • Wageincreasesnegotiated 2008 – effective 2009 • Taxreform effective 1.1.2009 • Stabilizingemployment via Short-time workand othermeasures in the LM Packages • Automaticstabilisers and monetary, financial, fiscal and labour marketpolicymeasures (stimulus packages ….) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  42. Labour Relations in Austria and the fight against Unemployment Thank you! FES - Ideas - Madrid 8.2.2010 Eva Belabed

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