10 EcoAustria annual report confirms suffering competitiveness and increasing labor shortage

The recently published report by the economic research institute EcoAustria sheds light on the most important economic developments in Austria over the last 10 years. When it comes to the labor market and migration, it becomes clear how much Austria's competitiveness is suffering and how the increasing labor shortage is weighing on economic performance.

There were around 300,000 job vacancies in Austria at the start of 2022. At the same time, more and more companies are complaining that they have already suffered a loss of sales due to the labor shortage or that this is one of the most pressing problems for them. The consistently high level of unemployment also points to structural problems on the labor market. This situation will continue to worsen in the coming decades, not least due to demographic trends.

One way to counteract this is to integrate more potential workers into the labor market. This shows that some groups in Austria have not yet been sufficiently integrated into the labor market: As many as 48.2 percent of Austrian women work part-time, including 25.2 percent of women without children and 72.8 percent of women with children under the age of 15. In addition, the de facto retirement age for men is only 62. The OECD average is 63.8, while the average in New Zealand is 68.2, in Sweden 65.8 and in Switzerland 65.4. In addition to the actual age, however, there is a need to raise the statutory retirement age in Austria.

In addition, the number of qualified immigrants from third countries is too low. The war in Ukraine and the resulting influx of potential workers will not solve this problem either. It must therefore be a key objective to attract a larger number of qualified potential workers to the Austrian labor market. The current reform of the Red-White-Red Card is an important first step in the right direction, as it provides for simplified eligibility criteria and allows for faster processing of future applications.

However, it is not only the lack of skilled workers and employees with higher and specific qualifications that reduces Austria's competitiveness. An international comparison shows that Austria also has some catching up to do in terms of the capital market and corporate dynamism. In the areas of market size, institutions and regulation, ICT infrastructure and distribution, health, education and labor market and qualifications, Austria is in the middle of the field. Product markets, innovation capability, institutions and regulation, basic infrastructure and macroeconomic stability are particularly well developed in this country.

Download: 10 Annual Report EcoAustria

Legend:

Red dot = need to catch up
Empty circle = midfield
Blue dot = Very good