Petra Draxl and Johannes Kopf, members of the AMS board, advocate for the expansion of employment foundations to assist the unemployed amid rising joblessness and expected funding cuts for labor market policies. They express concerns about a potential recession impacting unemployment rates, particularly in struggling sectors. Despite these challenges, they call for enhanced youth training programs and emphasize the importance of supporting both job seekers and current employees in adapting to economic changes, including digital and ecological transformations.
AMS Board Members Call for Enhanced Employment Foundations
In response to the ongoing crisis in the job market, Petra Draxl and Johannes Kopf, two members of the Public Employment Service (AMS) board, are championing the expansion of employment foundations designed to support unemployed individuals. Draxl emphasized the need for better structural positioning and resource allocation in a recent interview. Despite an increase in unemployment rates, the AMS anticipates a reduction in funding for active labor market policies in the upcoming year.
Employment foundations are vital for providing additional training to those without jobs and facilitating their reintegration into the workforce. For instance, individuals facing job insecurity, such as those employed by KTM or Kika/Leiner, can receive targeted assistance. A similar initiative was previously established during the closure of the Opel plant in Vienna-Aspern. Additionally, organizations like the Environmental Foundation focus on training specialists for green jobs, independent of corporate downsizing or bankruptcies.
Concerns Over Potential Recession and Its Impact on Unemployment
Amidst a stream of unfavorable economic news, the AMS is increasingly worried about a potential worsening of the economic landscape. Kopf noted that the country has been grappling with economic challenges for two consecutive years. He expressed skepticism about any improvements in the near future, stating, “If 2025 turns out to be another year of recession, unemployment will rise significantly.” Certain sectors, such as automotive suppliers, are already experiencing downturns.
The outlook for Austria’s economy and labor market remains uncertain as weak performance in various industries, combined with potential tariff threats, complicates recovery efforts. Economic forecasts from Wifo and IHS previously suggested a modest growth of 1.0% and 0.8% for 2025, along with a slight uptick in unemployment rates. However, Kopf cautioned that the updated forecasts due in December might lean towards a more pessimistic outlook.
Despite predictions of rising unemployment, AMS officials expect a decrease in active labor market policy funding, projecting €1.3 billion for 2025, down from over €1.4 billion in 2024. This reduction may necessitate a scaling back of training programs, potentially affecting the jobs of external educators who collaborate with the AMS. The AMS primarily focuses on promoting vocational training and subsidized employment opportunities, while unemployment benefits are sourced from insurance contributions.
In light of the expected funding constraints, board members Kopf and Draxl remain optimistic about the established budget, which they believe provides a degree of stability amid changing government dynamics. They also pointed out the possibility of special budgets for specific initiatives, such as the labor integration of migrants.
Future Aspirations for the Labor Market
Kopf and Draxl have urged coalition negotiators from ÖVP, SPÖ, and NEOS to enhance youth colleges funded by AMS, currently serving over 5,000 young individuals in Vienna. These institutions provide essential skills training and preparation for school completion or apprenticeships.
To invigorate the labor market, the AMS leadership insists that despite numerous economic challenges, there is a pressing need for additional support. They advocate for including both unemployed individuals and current employees in qualification programs, especially in light of digital transformation and ecological changes.
The labor market in Vienna is under significant strain, with approximately 155,000 unemployed or in training, out of a total of 372,000 across Austria. Among these, around 45,000 are asylum seekers or beneficiaries of protection. To redistribute recognized refugees more evenly across the country, AMS leaders propose a uniform approach to social assistance benefits and a residency requirement. With an anticipated decrease in the working population in the coming years, it is crucial to tap into all available labor resources, including part-time workers and those who are currently not participating in the job market.
The issue of apprenticeship shortages is particularly acute in Vienna, with five times as many seekers as available positions. This discrepancy is less pronounced in other regions, where supply often exceeds demand.