Austria – AK-Expert: Corona a “pandemic of inequality”
This can be seen, for example, in the figures on the risk of poverty. There was a slightly downward trend here in the last few years up to 2019, and poverty in Austria also decreased slightly. In 2020, the first year of the pandemic, the trend reversed and more people were at risk of poverty again, explains Schnetzer. The proportion of people at risk of poverty rose from 13.3 percent in 2019 to 13.9 percent in 2020. There are still no figures for 2021. “More than 1.2 million people in Austria are at risk of poverty, that is 13.9 percent of the population. This number has increased by a good 60,000 people.” Those who have less than 60 percent of the median household income are considered to be at risk of poverty. 350,000 children and young people are also considered to be at risk of poverty or exclusion – that is every fifth child in Austria.
In the second pandemic year of 2021 there was a “pretty rollercoaster ride” on the labor market. In January 2021, 535,000 people were unemployed or in training and around 470,000 people were on short-time work. Then unemployment and short-time work fell significantly again, only to rise again in late autumn. In December, 376,000 people were last registered without a job and almost 150,000 for short-time work. “Almost 1.3 million people have been on short-time work at some point since the beginning of the pandemic,” said the AK expert. Short-time working saved many jobs, but those affected suffered a decline in their income to 80 to 90 percent. “This increases the inequality in income when so many people have lost 10 to 20 percent of their income on short-time work, or up to 45 percent if they have become unemployed,” explains Schnetzer
In contrast, the distribution of wealth shows that many super-rich have become even richer during the crisis. According to Forbes magazine, the number of billionaires worldwide has risen by 660 to 2,755 since the beginning of 2020. In this country, according to the business magazine “trend”, the wealth of the hundred richest Austrians rose from 2020 to 2021 by 15 percent. Because while the labor market was down, the stock markets recovered relatively soon, according to the AK expert. The ATX, the leading index of the Vienna Stock Exchange, has been above the pre-crisis level since April. The dividends are also bubbling up again: in 2021, Austria’s ATX company distributed over 3 billion euros to shareholders. “The party on the financial markets was only briefly interrupted by the pandemic,” says Schnetzer. 58 percent of stock holdings are concentrated with the richest 10 percent.
Despite the pandemic, manager salaries at ATX companies rose by 4 percent to an average of 1.9 million euros in annual salaries in 2020 – 57 times the median income in Austria. Property prices have also risen, making the wealthy with large property holdings even richer. But the bottom line was that the pandemic was also a profitable business for the technology industry and online mail order business, because they made good use of the trend towards digitization.
Although the pandemic hit women on the labor market and to a similar extent, the double burden of working from home as well as homeschooling and childcare was mainly borne by the mothers: According to a survey by the Austrian Corona Panel 47 of women, only 29 percent of women are corona-related spend more time studying with their children and looking after children. “Almost every second woman had an additional burden,” states Schnetzer. During the lockdown, women in couple households with children would have worked 2.5 hours more unpaid daily than men.
According to the SORA Democracy Monitor, the psychological stress caused by the corona crisis has had very different effects on different income groups and the pressure has increased, especially for people with low incomes. In the lower third of the income group, 59 percent say that their mental health was lost during Corona, while it is 23 percent in the upper third of the income. The financial situation of those who are already poor has also changed frequently: 64 percent of the lower income thirds say this, and only 12 percent of the upper third. “People with low incomes in particular are afraid of losing their jobs,” says the AK expert. Medical care for mental health is often also a question of income, as there is a lack of therapy places, especially in child psychology.
The lockdowns and lessons were not easy under the difficult pandemic conditions, especially for children and adolescents. 37 percent of the children took tuition in 2021; according to the AK tutoring survey, this number has increased by around 10 percent within one year. The pandemic will have a long-term effect on employment and training opportunities, as poor families dying lack the financial means for private tuition and tutors, explains Scheme: “This will certainly be a network of inequality for a longer period of time”.
it is also about socially fair financing of the crisis costs. Austria currently finances itself extremely cheaply through government bonds, so it would be completely wrong not to make important investments during the crisis out of a savings idea. However, wealth taxes should also be used to raise funds and finance government spending. Austria is already one of those countries with the lowest wealth-related taxes of all industrialized countries: Only 1.3 percent of tax revenue comes from wealth-related taxes, while the OECD average for industrialized countries is 5.7 percent. “There is great potential due to the high concentration of wealth, since the richest percent of the population has 40 percent of the wealth”. Therefore, a tax would affect few people, but still generate a large tax revenue, according to the AK economist.