Tackling challenges on the labor market

There is currently good news from the Austrian labor market: After years in which the number of unemployed was almost always on the rise, it is now falling for the eighth quarter in a row due to the economic situation. "However, it is too early to sound the all-clear. There is still a mountain of challenges on the labor market," says Tobias Thomas, Director of the economic research institute EcoAustria. "At 280,000, the number of unemployed is ten times higher than in the 1970s and therefore at a sadly high level. In addition, there are 65,000 people in training programs. Unemployment means a loss of prosperity for Austria and a heavy blow for everyone affected," says Thomas.

The structural problems on the labor market will become apparent again at the latest when the booming economy slows down. In order to make the labor market fit for the future, flexibility should be increased and barriers to the labor market and new business models should be removed. In addition: "A well-designed reform of unemployment benefits can strengthen the incentives to take up paid work," explains Thomas.

In addition to flexibility and efficient incentives, education plays a key role in ensuring a future-proof labor market, especially with regard to long-term unemployment. One in three unemployed people in Austria is already out of work for more than 12 months. "In times of demographic change and digitalization, education and training as well as lifelong learning are essential in order to integrate the long-term unemployed and those entitled to asylum into the labour market. Education is also of great importance as a preventative measure against (long-term) unemployment," says Thomas in a guest commentary in the current issue of trend.