A triumph of failed ideas European models of capitalism in ... - Journal

The Austrian model and the financial and economic crisis.................................................................................................................................................................alleviating social problems. Cuts in research and education are particularlyproblematic given Austria’s poor record in both fields.3.2 Labour market policyThe government adopted a number of measures against the growth inunemployment, pooled in two labour market packages. The mostpopular measure was the reform of short-time working. The reform wasbased on a social partner agreement, underlining the role of the socialpartners in mitigating the effects of the crisis. Short-time workingexisted before the crisis but played only a minor role. Among otherthings it was used to help companies affected by environmentaldisasters. In October 2008, right before the outbreak of the crisis, 400workers were registered as taking part in short-time working schemes(BMASK 2010: 300). From the social partner perspective, short-timeworking is particular attractive since it helps to retain qualified staffand avoid unemployment, while most of the costs are covered bygovernment. No wonder the social partners quickly agreed to a reform,making it easier for companies to apply for short-time working andimproving support (Hermann 2011).The reform was based on two amendments of the existing regulations.The main improvements concerned an extension of the short-timeworking period, first to 18 and then to 24 months. At the same time, theproportion of short-time working was extended to any number of hoursbetween 10 and 90 per cent of regular working time (BMASK 2010:293–94). The reform also introduced a rebate for employer socialsecurity contributions after six months of short-time working andspecial financial incentives for companies which combine short-timeworking with training or further education (ibid.).Further details of the introduction of short-time working were regulated inan inter-sectoral framework agreement negotiated between the Chamber ofEconomy and the Trade Union Federation (Allinger and Flecker 2010;Hermann 2011). Austrian companies also need a company agreementsigned by a works council and a trade union representative if they want toswitch to short-time working. The two main unions representing workersin the industrial sector (PROGE and GPA-DJP) agreed that they would signcompany agreements only if the affected workers receive 90 per cent ofA triumph of failed ideas – European models of capitalism in the crisis 127