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

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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
Christoph Hermann and Jörg Flecker.................................................................................................................................................................their regular wages, regardless of how many hours they were working.Since about 60 per cent of wages was covered by the Labour Market Service(the rate for unemployment benefit), the rest had to be paid by thecompanies. Except in a number of small and medium-sized companies theunions were mostly successful in obtaining the 90 per cent replacementrate. While the social partner negotiations on the short-time workingreform ran fairly smoothly, introduction on the company level occasionallysparked conflicts (Hermann 2011).Short-time working is widely considered a success. It was used mainly inautomobile production and by auto suppliers, as well as in engineeringand the metal sector more generally. At the peak of development in April2009, more than 300 companies had introduced short-time workingaffecting more than 37,000 workers (BMASK 2010: 300).Figure 1 Development of short-time working in Austria, 2007–201080.00070.00060.00050.00040.00030.00020.000average number of workers onshort-time workingtotal number of workers onshort-time working10.00002007 2008 2009 2010Notes: Average number is based on the average of 12 reporting days distributed over the whole year. Total numberis the total number of workers registered as working short-time during the same year. Since most short-timeworking periods are shorter than a year, the total number is significantly higher than the average rate.Source: Federal Ministry of Employment, Social Affairs and Consumer Protection.The Federal Ministry of Employment, Social Affairs and ConsumerProtection estimates that short-time working saved approximately30,000 jobs (BMASK 2010: 304). Alfred Stiglbauer (2010: 35), however,estimates that the effect was much lower. Assuming that 26 per cent ofthe 26,000 employees on short-time working would have lost their jobs –26 per cent was the average reduction of time in short-time schemes – he128 A triumph of failed ideas – European models of capitalism in the crisis
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Table of contentsSteffen LehndorffI
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Italy: Chronicle of a crisis foreto
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List of contributors...............
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EuropeanTrade Union InstituteBd du
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