Rising Unemployment in Austria: A Concern for the Future of its Economy and Workforce

In March, Austria experienced a significant increase in unemployment for the first time in months. The number of unemployed rose by double digits, with almost 36,000 more people registered with the Employment Service (AMS) compared to the previous year. This was despite favorable employment conditions typically seen around Easter.

The rise in unemployment was most pronounced in the construction and industry sectors, with men and younger people being disproportionately affected. Despite this, older employees aged 60 and over saw an increase in employment.

Labour Minister Martin Kocher acknowledged the challenging economic environment, with the unemployment rate standing at 7.5 percent in March 2019 before the pandemic hit. The current rate of 6.2 percent is still higher than pre-pandemic levels.

The Chamber of Labor expressed concern about the rise in long-term unemployment, particularly affecting those with health issues and older individuals. They also raised concerns about the financial difficulties faced by households affected by unemployment.

Amidst criticisms from opposition parties, the government was called out for inaction in addressing the rising unemployment figures. The ÖGB managing director also raised concerns about the mismatch between rising unemployment and the demand for skilled workers, particularly in sectors like tourism.

Despite a decrease in available vacancies reported to AMS by 18 percent year-on-year, there is still high demand for skilled workers in industries like electrical installation and cooking. There is hope that relief and an increase in work permits will address labor market challenges.

The AMS boss Johannes Kopf expressed concern over the development, noting that Austria was still in a clear recession and that a rapid recovery reducing unemployment was unlikely due to high inflation and excess personnel capacity in companies.

In conclusion, Austria’s recent rise in unemployment poses a significant challenge to both individuals and businesses alike. While there are opportunities for relief and an increase in work permits to address labor market challenges, it remains uncertain when we can expect a full recovery from this recessionary period.