Of . – 08/09/2022 12:50 (act 08/09/2022 14:23)
Institute estimates that workers in Austria will experience a sharp drop in real wages in 2022. ©Portal/Regis Duvignau/Illustration (image of symbol)
Bad news for workers in Austria: The union-linked German Institute of Economic and Social Sciences (WSI) estimates they will experience a sharp drop in real wages this year.
Even with payment by collective agreement (KV), there will be an average drop in income of 4.2% in 2022, including inflation. The year before, there was still an increase of 0.7 percent – although those who were paid only according to the KV already had a real salary of less than one percent in 2021.
Institute estimates: in 2022 there will be a sharp drop in real salaries of employees in Austria
According to the WSI, Austria will perform worse this year than the EU average, where real wages (plus overpayments) will fall by 2.9%. Compared to the negative 4.2 percent in Austria: in Hungary the reduction will be 0.3 percent, in the Czech Republic it will be minus 8.3 percent. A decline of 2.9% is expected in Germany and 2.1% in Italy. Within the EU-27, Austria will see the second biggest decline in real earnings, according to WSI data.
Nominally, ie excluding strong inflation, a 1.5 percent rise is expected for this year in Austria. The EU average is seen at 3.7 percent, neighboring Germany is expected to rise to 3.4 percent. It is also interesting to take a look at productivity, i.e. real GDP per person employed: this year, with reference to EU figures, an increase of 1% in Austria is expected, 1.5% in the EU and 0.8 % in Germany.
unemployment in austria
Although Austria lags in terms of wage growth and productivity, unemployment looks better this year than the EU average. In Austria, the unemployment rate is 5% this year, in the EU at 6.7%, in Germany, however, only at 3.3%.
It is impressive that in Austria 98% of employees are still in a collectively agreed employment relationship, only in France and Italy the proportion is even higher. In Germany, 52% of employees are covered by collective agreements.
The government referred to a possible wage-price spiral
In June, with reference to a possible wage price spiral, the government suggested that one-time bonuses should be considered for the next autumn wage round rather than percentage wage increases – which is normally prohibited for unions as this is not sustainable. “The KV negotiations are conducted with the aim of ensuring sustainable wage and salary increases and the fair participation of employees in productivity growth. APA.
Spring salary round in Austria
And how was the spring salary round this year in Austria? Overall, wage and salary agreements were between 3.5 and 5 percent. The big chunks were the collective agreements (KV) of the electronics industry trade associations with an increase of 4.8 to 5.0 percent, the chemical industry with 4.75 to 4.95 percent and the paper industry with 4 .75 to 4.9 percent. Wages in these traditionally heavily unionized industrial sectors with a high proportion of skilled workers are generally higher than those in smaller, more commercial sectors. Metalworkers then start in autumn, their conclusion is the guideline, even if the trade, which ends with a slight delay – with about half a million employees, the largest KV group – as per experience agrees with this.
To explain: traditionally, when the social partners haggle over the collective agreement, two basic numbers are used: the inflation of the last twelve months and the increase in productivity. In times of declining inflation, looking back at the past year is helpful for employees, but when prices are rising sharply, as is the case at the moment, looking back is in the best interest of employers.