Living at the Edge

With the global crisis and Christmas on the way, many feel the added pressure of not being able to provide for their families

News | Franziska Nebehay | December 2009 / January 2010

By the end of October, unemployment in Austria was up to 6.8% according to the Austrian Federal Employment Agency (Arbeitsmarktservice, or AMS) – an increase of 1.2% over a year ago. This means that some 320,000 are out of work, including 246,000 jobless and further 74,000 who are currently attending vocational training.

Month by month, the trend appears to be softening, with October showing an increase of less than 50,000 new jobless, largely the result of the decision to reduce working hours rather than lay people off, a situation now affecting about 36,000 citizens.

However, from a European perspective, Austria remains among the least altered by the financial crisis, with an adjusted unemployment rate of 4.8% (excluding those attending vocational training). Only the Netherlands, at 3.6%, can count fewer jobless. The strongest impact of the crisis is being felt in Spain (19.3%) and Latvia (19.7%).

Federal Chancellor Werner Faymann ascribes Austria’s strong performance, in comparison to other EU-states, to the country’s economic structure: "In the current situation Austria benefits from its many small and medium-sized companies", he stated recently. "In spite of Austria’s comparatively good figures," he added, "there is no reason to be happy about the present situation. We can’t be satisfied until unemployment rates noticeably go down again."

On average, the rate of unemployment for the EU as a whole is hovering at 9.2%, according to Eurostat, the EU’s statistical information provider. This is the highest rate of joblessness since the 27-member statistical database began in 2000. In the Euro-Zone, made up of the members of the European Monetary Union, figures are slightly higher with an average unemployment rate of 9.7%.

In Austria, the industries most affected have been in the technical sector, where the rate of unemployment was up 51%, and up 29% in the manufacturing sector, leaving 18,000 more people jobless over a year ago.

Helmut Mahringer, labour market specialist at the Austrian Institute of Economic Research (Wirtschaftsforschungsinstitut, or WIFO) traces these trends to impacts of the worldwide economic crisis.

"The global economic crisis induced cutbacks in the export sector, because the demand for commercial goods produced in Austria went down," Mahringer said in a recent interview with The Vienna Review. "This has meant a decline in production, which as a consequence has brought about staff cuts in these industries."

One who can tell a tale about this is 37-year-old instrument mechanic Walter, who was laid off in September – the justification: the present state of the economy. Eager to work, he feels stymied. "There are no appropriate openings for me," he said – at least none within an easy commute. He had just been offered a position he would have gladly accepted, if it had not been so far away from where he lives.

With Christmas coming he feels the added pressure of not being able to provide for his family. "I don’t know if I will be able to buy anything nice for my little girls," he said, turning his gaze to the ground. "That makes me very sad. They are so young; the oldest only six." For a second he looks up, but immediately drops his eyes again. "As my wife and I live apart, I don’t get together with them too often – at least for Christmas I would like to see them happy."

The setting of the AMS office in the 3rd District, however, would not immediately suggest this is a place for people in hard times. Not at first glance, anyway. The premises are located in a handsome old Jugendstil building, with ample, bright rooms – all in all a very friendly atmosphere. The people coming in and out of the office, though, do not seem to care much about the exceptional architecture – understandably, perhaps. Who would pay attention to these details when in such precarious circumstances? Not Walter anyway. On the contrary, he would be "very happy" if he "never had to return to this place again."

But it is not only people from the manufacturing sector, like Walter, who are feeling the effects of the economic crisis. Layoffs in the construction industry also recorded an increase of 24%. Some of this is a statistical anomaly: due to the very prosperous 2008:

"Any industry that flourished before the crisis will perceive the effects more strongly than other sectors," Mahringer explained. Trade, on the other hand, registered an increase of "only" 19%, reflecting relatively little impact of the crisis so far.

Men have been more affected by these changes than women, with male unemployment up by 28%, double the 14% increase for women. The reason for that development: women work primarily in the service sector, which hasn’t taken as much of a blow, Mahringer says, and in lower-paying executive support positions. The men whose jobs have been affected most are more likely to have been employed in the export economy, in construction, or manufacturing – industries which are feeling the most severe impact of the economic crisis at the moment.

However, none of this helped 22-year-old Sigrid, who, in opposition to the current trend, lost her job as a secretary in September. She decided to seize the opportunity to take the Matura (Austrian secondary school examination). The additional courses she will need will be paid for by the AMS, which offers generous allowances for continuing education as part of the unemployment benefits to all Austrian workers regardless of nationality.

But Sigrid is glad that she can also expect help from her parents at any time:

"They have never put me down because I was laid off," she said. "On the contrary, they back me up with mental encouragement, and they are very proud that I will catch up now and complete my Matura."

From this point of view, however, Sigrid fits right into the statistical mainstream: Adolescents and seniors have suffered most from the rise in unemployment: the number of young people up to the age of 24 who are out of work has risen by 17% this year, and in the 50+ generation it has increased by nearly 20%. It is the people at the edges of employable age who are most likely to be dismissed in times of crisis, Mahringer stated.

Across the country, Upper Austria heads the list with an increase in unemployment of nearly 41%, followed by Vorarlberg (+33%) and Lower Austria (+28%) – regions that are home to industries that were flourishing before the crisis and thus are feeling the impacts more strongly than elsewhere. Upper Austria, for example, specializes in industries such as manufacturing, vehicle manufacturing, and metal production – sectors that have been hit strongly by the crisis. KTM, for example, an Upper Austrian motorcycle manufacturer, had to cut jobs en masse recently. And the international steel company Voest Alpine, which is based in Linz, was also forced to reduce personnel in great quantities.

Since the escalation of the global financial crisis after the collapse of the U.S. investment bank Lehman Brothers on September 15, 2009, more than 5 million people have already lost their jobs in the European Union.

In spite of the unemployment woes expressed here in Vienna, the bigger European picture tells a different story, one that just might have a happier ending ahead.

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