Unemployment rate shrinks as Austria braces for EE workforce

Austria’s unemployment rate has dropped, half a year before the country must fully open its labour market to workers from European Union (EU) states in Eastern Europe (EE).Statistik Austria announced today (Weds) 179,000 people were out of work in the fourth quarter of 2010, down by 21,000 or 10.6 per cent compared to the same period the previous year.The statistic body said the developments mean unemployment dropped by 0.6 per cent to 4.1 per cent. Around 4.4 per cent of people living in the country had no job in the third quarter of last year. Only the Netherlands (4.3 per cent) are doing better in this regard than Austria among the 27 EU member states, while the EU average is 9.6 per cent.Statistik Austria stressed the number of people aged between 15 and 24 looking for a job in Austria declined from 9.3 per cent to 7.5 per cent year on year in the final three months of 2010.Some labour market experts, politicians and works council officials are meanwhile worried that the liberalisation of the Austrian labour market next May will lower the average payment level in the country.Freedom Party (FPÖ) boss Heinz-Christian Strache claimed the government coalition, formed by the leftist Social Democrats (SPÖ) and the conservative People’s Party (ÖVP), has done nothing to prevent a “wave of workers” coming to Austria from EE.Austrian leaders agreed with EU labour market authorities over a seven-year transitional period keeping people from countries in EE which joined the EU in 2004. This regulation expires in May.Austrian Labour Market (AMS) director Johannes Kopf said he expected more competition in some sectors in Austria. “In hindsight, it would have been better to open the labour market in 2008 when the Austrian economy was booming. We would have coped with it much better at that time,” Kopf claimed last April when Austria was suffering badly under the credit crunch.An additional 25,000 people from Hungary, Poland, Romania and other countries are expected to come to Austria for work in the second half of this year.Rudolf Kaske, head of workers’ union vida, urged authorities to call for higher punishments against companies caught employing staff illegally.Johannes Kepler University Linz professor Friedrich Schneider said earlier this week that around one million of the overall 8.5 million Austrians occasionally work without letting labour officials and insurance companies know of their activities. He also claimed around 100,000 to 200,000 Austrians were “full-time illicit workers”.The value of illegal work in Austria could range around 20 billion Euros or eight per cent of the gross domestic product (GDP) this year, according to Schneider.ÖVP State Secretary of Finance Reinhold Lopatka said 7,800 complaints over firms employing unregistered staff have been made to labour courts and state prosecutors across the country in 2010. Detectives sent out by the finance ministry caught 11,300 illegally assigned workers last year, he added.SPÖ Labour Minister Rudolf Hundstorfer vehemently dismissed fears the situation on the Austrian job market will get worse for Austrians on 1 May because of the expiration of the country’s agreement with the EU.Referring to studies, the minister said “not more than 20,000 to 25,000” people from Poland, Slovakia and other EE countries will enter the domestic labour market. “We will be able to handle this,” Hundstorfer said in a radio interview earlier this week.FPÖ General Secretary Herbert Kickl reacted to the statement by accusing the minister of “not facing the reality”.