Austria's labor market: urgent need for reform for the future!

Austria is currently faced with significant structural challenges on the labor market. Rising costs, falling working hours and the lack of necessary reforms put a strain on the country's competitiveness. In a discussion forum of the reform club of "Die Presse", Monika Köppl-Turyna von Ecoaustria and Joachim Haindl-Grutsch from the Upper Austria industrial association discussed the urgent topics.

In the past 20 years, the country has recorded an increase in part-time work and an increasing focus on a balanced “work-life balance”. As a result, the annual working time decreases per employed, which in turn leads to falling productivity. As a result, the wage costs increase because the salaries rise while productivity decreases. Experts indicate that the tax progression represents a hurdle for overtime; If working time increases by 50 percent, the net content only increases by a third.

necessary reforms in the pension system

In Austria, the average pension age is four years below the average of the OECD. An increase to 67 years could enable the state to save 5 to 6 billion euros annually. In order to implement these savings, incentives have to be created so that older workers stay in the labor market for longer. In addition, the high bureaucracy costs, which are considered internationally unique in Austria, are considered a critical obstacle.

Furthermore, high transfer services lead to incentives for the recording of jobs. There is an urgent need for a more efficient state apparatus and targeted reforms to promote performance -oriented society. The urgency of reducing false incentives in the social and transfer system and increasing productivity by increasing the annual working time is undisputed. The overarching goal is to secure Austria's competitiveness and bring the country on the road to success.

In the meantime, the German pension system is also under considerable reform pressure due to demographic change. According to a survey by the German Economy Institute (IW) from 2023, it can be seen that despite the large -scale concern, there is no majority for reforms of insurance system mechanisms in the population. In a factorial experiment, connections between the contribution rate, retirement level and retirement age were analyzed, but which could not overcome the existing reforma version, such as Iwkoeln.de reported.

The status quo receives great support, but could only be financially sustainable by increasing the tax subsidies, which would put a lot of strain on the state treasury. While an increase in contribution rates is least rejected, pension cuts are considered the most painful option for the population. A delay of the pension of one year is assessed as negatively as increasing the contribution rate by three percentage points or reducing the pension level by four percent.

Especially among the over 50s, the slightest acceptance for reforms is evident, while those under 50-year-olds, who are more concerned about their pension, show a significantly weaker rejection of all reform options. The pressure on the pension system causes flexibility, especially among younger people. It is recommended to address the over 50-year-olds in order to show the social consequences of non-action, since a failure to act, either requires an increased obligation to operate and private retirement provision or, by ensuring a constant level of pension, could lead to an enormous burden on the state budget.