News The budget for short-time work is increased to 12...

The budget for short-time work is increased to 12 billion euros

The number of unemployed in Austria fell by 55,500 within a week. Corona short-time work secures more than 1.3 million jobs. The government is increasing the budget for this again.

Unemployment has been falling steadily since the corona-related high in mid-April. Compared to the previous week, the number of unemployed and training participants decreased by 17,000 to 533,000, as Minister of Labor Christine Aschbacher (ÖVP) said on Tuesday. The peak in mid-April was 588,000 people affected, a record figure since 1945.

For comparison: Before the corona shutdown in mid-March, there were 399,000 people in Austria without a job at the end of February. Currently, more than 130,000 people are still unemployed than before the corona crisis, but since mid-April 55,500 unemployed have found employment again.

You can see “a pleasing flattening of the curve”, said Labor Minister Aschbacher at a joint press conference with Finance Minister Gernot Blümel and Economics Minister Margarete Schramböck (all ÖVP) in Vienna. The most significant decline is in construction, where unemployment has decreased by around 25,000 people. Furthermore, the restaurant reopening last Friday caused unemployment in this area to drop by around 9,000 people within a week.

Corona short-time work provides enough information for almost 111,000 applications from companies. According to the Ministry of Labor, these applications would include over 1.3 million jobs. Around 108,000 applications have already been approved. Almost 29,000 companies have already received short-time work benefits and around 273 million euros have already been paid out. Finance minister Blümel announced on Tuesday that he would increase the budget for short-term corona work from 10 to 12 billion euros.

Blümel left open whether it would be possible for companies to extend short-time work over the currently possible two or three months. “The talks are on.” It would “of course also need measures to secure the business location and enable it to hold jobs and perhaps create new ones,” said the finance minister. “There will also be negotiations about which models may need to be available for specific industries beyond this period.”

3000 checks, 700 violations

The budget of 12 billion euros for short-time corona work might not be exhausted. “We see in the accounts that luckily more work could be done than originally thought,” said Blümel. Due to complaints, the financial police are currently examining the implementation of short-time work in companies. There were almost 3000 checks and about 700 violations were found.

Minister of Economics Schramböck reminded of the health and legal requirements in view of the Covid 19 clusters triggered by temporary workers in a mail distribution center in Lower Austria and Vienna. “If something is not communicated here, my understanding is absolutely limited, and then there must be strict corresponding measures. The same applies to the responsible authorities,” said Schramböck.

In view of the record unemployment figures, the SPÖ and the union continue to demand an increase in unemployment benefits from the current 55 percent to 70 percent of their last net income. SPÖ social spokesman Josef Muchitsch again stated that everything must now be done so that mass unemployment does not lead to mass poverty. ÖGB President Wolfgang Katzian warned against being overly optimistic about the slow start of the economy. “Despite all the joy that unemployment has now decreased slightly, more than half a million people in Austria are still out of work, with 50,000 jobs being offered at the same time,” said Katzian in a press release on Tuesday.

The NEOS again criticized the slow payment of short-time funds. “There is no point in increasing the budget funds for short-time work by billions every 14 days if the help is not received by the companies. Many are now running out of liquidity,” said NEOS social spokesman Gerald Loacker.

Foreigners and workers more affected by job loss

The peak in unemployment growth as a result of the corona crisis appears to have been exceeded, according to the Economic Research Institute (Wifo) in its current monthly report. In April, the drop in employment hit men and women equally. Foreign citizens and workers are currently facing much more difficulties in the labor market.

After rising to a record 563,000 people (including training) at the end of March, unemployment initially increased further in April. The rise came to a standstill in mid-April, also at annual intervals. At the end of April 2020, 522,253 unemployed and 49,224 people were registered for training with the Labor Market Service (AMS) – a total of 571,477 people, 58.2 percent more than in the same period of the previous year.

A group particularly affected by the crisis is that of workers. According to Wifo, this should be due to the significantly weaker protection against unfair dismissal. While workers usually only have a notice period of 14 days and can be dismissed on any weekday, employees are entitled to six weeks to five months, depending on the years of service. Individual collective agreements can also stipulate other deadlines and termination dates.

The weaker position of the workers is reflected in the statistics. In April the employment decline of this group was 12 percent compared to the same month of the previous year, while there was hardly a decrease for employees and civil servants (-0.8 percent). Wifo calculated that nine out of ten of the jobs lost in April were workers. Tourism, the cultural sector, other services such as hairdressers and agency workers were particularly badly affected.

The stronger protection against dismissal of employees in combination with short-time work seemed to have a stabilizing effect on employment, the Wifo states.

Foreign nationals have also recently been affected by the rate of employment decline, with a rate of 9.2 percent, significantly more than nationals (minus 3.9 percent). According to Wifo, this is due to the high proportion of foreign employees in the sectors most affected. In addition, many commuters residing outside of Austria could no longer get to their work because of the corona measures.

Wifo believes that what will happen next depends largely on the virus spread and the success of government support measures for companies. As a result of the slump in growth as in the 2009 financial crisis, job cuts could be significantly mitigated by short-time working. “If the crisis and the period of uncertainty do not last too long, companies can survive, the economy quickly gets going and many of the unemployed return to their previous jobs, the job market could also relax quickly,” predicts that Institute. Nevertheless, there is a risk that unemployed people with little chance of re-employment remain unemployed for longer or longer periods.



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