Austrians appreciate a fair day’s work if it doesn’t interfere too much with their private lives. But as the economic heart of Central Europe, the country scrambles to redefine its relationship with work.
“It’ll be like the Staatsvertrag,” scoffs 29-year-old Jan Stiglitz over the clinking of glasses. That is, the employment contract the young Czech will be signing the following week. It may not have the geopolitical ramifications of the Austrian State Treaty in 1955 ending the postwar occupation in exchange for neutrality. But getting there was just about as arduous.
“I’ve been looking for a job in Vienna for more than half a year, because I want to be close to my girlfriend in Bratislava,” explains Stiglitz in perfect German. “It’s not even that companies are not interested; they are. But everything takes ages… It’s as if they aren’t looking for an employee but for a partner for life!”
Vienna is growing fast. In the last five years, it has grown by 150,000 people, equal to the entire population of Salzburg. Austria itself has welcomed half a million new citizens in the last decade and is set to have 9 million inhabitants by 2025. This spectacular growth is a testament to the country’s promise and success in a borderless Europe. Yet it also poses new challenges for a society that values its unhurried, comfortable Gemütlichkeit above all. Nowhere is this more visible than in the labor market.
Island of the blessed?
In the 1970s, social democratic chancellor Bruno Kreisky introduced strong social
safeguards for workers, including paid maternity leave.
ÖNB – Cermak
Austrians are a relaxed bunch. They value work but see it mainly as a means to living the good life. If you like your job, wonderful! If you don’t, well, there are over five weeks of mandatory paid vacation on top of 17 odd public holidays for enjoying what you earn. Either way, career plans – or, God forbid, money – are certainly not a big conversation topic at the dinner table or family parties. Better to talk about your next vacation, the new book by Michael Köhlmeier or the merits of the new director at the Vienna State Opera.
That Austrians can be laid-back about all this reflects a society of generous benefits and strong social safeguards for workers, including the right to paid maternity leave for up to three years – thanks to Austria’s legendary social democratic chancellor Bruno Kreisky in the 1970s. But even more importantly, they reap the benefits of a system that has consistently delivered enough decent jobs, outperforming even the U.S. Over the long run (1960–2017) Austrian unemployment has averaged 4.7% compared with 6.2% for the U.S. But recently the positions have reversed; Austria is now over 5% and American below. The real difference is consistency: In the long term, where U.S. joblesslness bounces between 4% and 10% the Austrian rate ambles along at a comfortable 5–6%.
About 40% of Austrian teenagers are choosing to do an apprenticeship. Especially boys: 2/3 of the apprentices are male.
Lyzs / Westend61 / picturedesk.com
How do the Austrians do it? Are they actually also happy with their career choices? And, finally, why are so many bright young people like Stiglitz still struggling to find a job after moving here?
To answer these questions, we’ve got to delve deep into what psychologist Erwin Ringel called “the Austrian soul” – and into what a German committee on education called in 1964, somewhat less prosaically, the “dual system”.
Let’s start with the young Austrians Edgar, Daniel, Melanie and Barbara. Having grown up in the same region in Styria, their careers took decidedly -different turns early on after elementary school. While Edgar and Daniel went to a classical Hauptschule (general high school) in the countryside, Melanie and Barbara went to Gymnasium (grammar school) at age 10. At 14, Daniel and Melanie switched to a Handelsakademie or HAK (commercial high school), while Edgar droped out of school at 15 and started a three-year course of vocational training as a metallurgist at Sappi, a South African giant in paper production with a plant in Styria. With over 1,200 local employees, the company’s declared goal is to fill the position opened by every retiree with someone trained from the ranks – so far, with success.
In 1965 workers succeeded in getting better pay and higher child benefits.
Meanwhile, our other three friends went on to earn their Matura (high school diploma), the entrance ticket for university (tuition free, by the way). However, Daniel then decided to do a fast-track apprenticeship as well, at DB Schenker, a logistics company, and started working right away. Barbara and Melanie went on to university. But while Barbara chose law – in Austria still at least a five-year slog – Melanie passed the exam for a forwarding merchant. She then pursued a degree in accounting and controlling at a Fachhochschule (University of Applied Sciences) while working full-time as a freight forwarder. By the time Barbara completed her law degree in her mid-20s and got her first job at a Viennese law firm, her friends had been working for five to ten years already, climbing up the income ladder, accumulating credentials, experience and, of course, money.
Land of hammers
Granted, there are also myriad career tracks and opportunities in the countryside that differ from those in big cities. Still, these examples give a good picture of how the Austrian labor market works and what counts, for many, as a dream job. Currently, about 39% of all Austrian teenagers do an apprenticeship, two thirds of them are male. These consist of mentored, on-the-job training in more than 200 clearly-defined professions such as office clerk, hairdresser or electrical engineer – a system hailing from the years of apprenticeships in the Middle Ages – while young professionals also have to attend part-time vocational schools.
Unemployment rates 12/2016
While experts warn that these rates do not always translate into sustainable employment, Austria’s overall unemployment rate has
plenty of room for improvement.
“The dual education in Austria is certainly a model for success,” says Alexandra Förster-Streffleur, Senior Project Manager at Business Circle, an organizer of a conference on the Austrian apprenticeship model. “It is a major reason behind the comparably low Austrian youth unemployment.” After completing an apprenticeship, a great many (40–44%) stay on at the same company.
Another pillar consists of the numerous graduates of higher technical or commercial schools who, much like apprentices, begin their working lives trained in a regulated profession. Finally, the Fachhochschulen tailor their courses of study to the demands of the labor market (and unlike public universities are allowed to restrict the number of students), offering companies another cohort of highly-specialized professionals. The result is an exceptionally low rate of youth unemployment (10.5%), better only in Switzerland, Germany and, by a whisker, the Netherlands. The comparably low number of university graduates, often decried by the OECD, pales in comparison.
Youth unemployment rates 12/2016
Unemployment among teenagers and young adults (aged 15-24) is well below the EU average. Many credit this to the “dual education” system.
A country for old men
But what about older workers falling prey to the ever faster churning labor market and rising demands of a changing economy? Austria’s employment service, the AMS, takes the challenge head-on with courses for 70,000 unemployed at any given time – a seventh of the total – working to upgrade their skills and get them into new careers. Austria spends about 0.6% of GDP on such active labor market policies, nearly three times more than the U.S. While often ridiculed, these courses can work, as Thomas Gruber, 58, can attest. Having originally studied business, Gruber ran the family’s plant nursery for 30 years.
Needing a change, he sold the nursery in his early 50s and set out to find something new. He sold insurance and vacuum cleaners. Then, after taking a two-month AMS refresher course in business , he landed a job offer as controller at a big Styrian publishing house – and in less than two years, became CEO of the company. “The course gave me back my confidence and upgraded my skills on recent accounting programs,” Gruber related. “It might not seem like a lot, but that’s what ultimately got me where I am now.”
The TV show MA2412 is a popular spoof of Austrian bureaucracy.
There is also, of course, the Austrian fondness for patronage and the undiminished enthusiasm for the life of a civil servant, a source of imperial pride since the 18th century. While the country’s Beamte are often mocked – in the famous TV show MA 2412, a spoof on Vienna’s sprawling bureaucracy, the ever-joyful Frau Knackal once quipped: “Please call again in the afternoon, but not after 1pm.” Many Austrians see themselves in just such a position. Even today, more than 30% of Austrian university students hope to become public servants after graduation.
Emperor Joseph II would have been proud. The most reform-minded of all Habsburg monarchs (1780-90), he promoted a society based on just and rational laws, counting on a highly professional bureaucracy to enact his bold vision that “all citizens, from serfs to powerful aristocrats,” as historian Pieter M. Judson put it, shared the same legal position. This proposition set him on a collision course with powerful vested interests who wanted to preserve traditional hierarchies but elicited fanatical loyalty from the general public, who for the first time could rise through the ranks through education and hard work.
Austrians, it turns out, really do cause revolutions by going to the Amt (joining the civil service).
When you graduate from a HTL (technical college) you’re prepared to enter the workforce, unlike in many academic areas of study.
Lyzs / Westend61/picturedesk.com
East of Eden
The flip side of this ostensible workers’ paradise is considerable too. While most Austrians are happy with their jobs – a 63% satisfaction rate in 2017 vs. a dismal 30% in the U.S. – their high degree of specialization is an increasing risk factor, particularly as they get older. Furthermore, the tight-knit collaboration between schools, colleges, companies and the state (with its list of closed professions) that serves locals so well makes it very difficult for an outsider to break into the labor market.
It is a well-oiled machine: Be a cog and you’ll be rarely at a loss for good jobs. But try to change the design from outside, and you’re not just regarded with suspicion, the engineers will struggle to take over your idea while you end up on the factory floor: A dearth of perspective that leads to losses on both sides.
The elusive golden apple
“The Austrian labor market is extremely formalized, geared to workers who have passed through the Austrian education system,” explains Gudrun Biffl, dean of the Faculty of Economics and Globalization of the Donau Universität Krems. “For them, it works very well. But it struggles to accommodate highly-educated newcomers. For foreign graduates who would like to enter middle management, it’s particularly hard.” In 2016, an astonishing 18 % of Austrian workers had foreign passports, with those from the 10 EU new-member states of CEE alone having doubled to 230,000 in just five years. So what’s the problem?
“Most of these professionals are employed in lower-paying industries such as health care for the elderly, tourism, gastronomy or construction, often under their qualifications,” Biffl explains, mentioning a Czech school teacher working as a maid at a Tyrolean chalet and a Russian researcher at the Moscow Academy of Sciences supplementing her income with a summer stint as a fruit harvester. “You even have doctors educated abroad coming here as domestic help or as waiters. Rarely are they ever considered for higher positions.”
In Austria many otherwise qualified foreigners can be found in lower-paying sectors like healthcare for the elderly.
De Visu – Fotolia/OTS
Sometimes, poor language skills play a role too, as mastery of German plays an outsized role in many Austrian firms. But many are willing to improve and, Biffl points out, their mother tongues and social networks back home can also be an asset for employers like L’Oreal or the Austrian banks who have expanded vigorously in the region. “They are actively looking for leaders in the region,” Biffl says, “and even invite them to work in Austria to build them up as managers for their home market.” Often, however, they would like to stay “but are not really offered any choice.”
There are remedies, insists Biffl. “The Austrian Gewerbeordnung (trade regulation act) should become more flexible and companies need to recognize the potential that migrants offer them. There’s so much creativity out there in the CEE region, we should try to bring it in.”
Expat university graduates also struggle. “I’d love to stay, particularly now after Trump,” says Jake Foster, an American with a Science degree from the Technical University (TU Wien). He would need a well-paid job (€1,900 monthly salary or more) to qualify for an EU work visa.
“In the end, I might just go back to teaching English,” he concedes. Agnès Chanut, a French hydro engineer, also a TU Wien graduate, has had similar experiences. “Most companies simply have no box to put me in,” Chanut says. While she loves the culture, and facilities for her three children, “it’s next to impossible to convince an Austrian company to take a chance on a well-educated foreigner.” If nothing materializes, Chanut and her family will return to her native France in the next half year.
On February 21, the federal government agreed on a template for the “employment bonus” (Beschäftigungsbonus). The bonus gives employers the chance to apply for a grant, covering half of the incidental wage costs (Lohnnebenkosten) for additional employees for a time period of three years. This grant applies to Austrians and third country nationals with a Red-White-Red Card, but not to EU members.
Bravely into the future
Slowly but steadily, however, the collision of traditions is changing the country, and in many ways for the better. Chancellor Christian Kern’s (SPÖ) insistence that Austria needs a “startup mind-set” has so far been matched by €185 million to support young firms and recently, with the launching of two brand-new startup hubs in Vienna: the incubator weXelerate (a cooperation of the Austrian invesment funds Speedinvest and i5invest, the startup development company Blue Minds Factory and the Pioneers Festival) and a new branch of the Italian coworking network, Talent Garden. The aim is to make the city a leading center for innovation in Central and Eastern Europe. Meanwhile, Foreign Minister Sebastian Kurz is urging more “courage to be an entrepreneur” and calling for Austria to develop a “culture of failing.”
“The idea and the ambition of these projects are certainly admirable,” agrees Stiglitz. “Still, I can’t shake the feeling that most Austrians might like to host promising new companies, but are not yet so eager themselves to hire professionals from Poland, Hungary or the Czech Republic in good positions. To be really successful, though, these must go together.”
Stiglitz has now found an entry-level position in Vienna, but after half a year of near-misses and delays in Austria, a friend of his, with a Master of Science from the TU Wien, work experience and fluent German, moved back to the Czech Republic to accept a senior position at Skoda Auto’s development and innovation department.
“Should he get a good job offer here one day and move back,” Stiglitz smiles, “then I’ll know Vienna has really made it as a hub for Central Europe.”
For this spirit to take root, Austrians don’t have to give up one of the best job markets in the world or change their generous work-life balance. They just have to stop expecting every newcomer to sign in blood at the bottom of a Staatsvertrag to get a shot at making a contribution.