Labor market: USA role model for Austria?
The practice of “interim parking” already costs several hundred million euros a year. A higher unemployment benefit could be temporarily terminated. How to prevent that.
Unemployment insurance is to be reformed in Austria – and many construction sites are still open. One concerns the practice of “temporary terminations”, also referred to somewhat pejoratively as “temporary parking” from initially at the Public Employment Service (AMS). Labor Minister Martin Kocher, who sits in the government on an ÖVP ticket, has named better protection for unemployed people as a main goal of the reform. He has a “degressive unemployment benefit” in mind – that is, unemployment benefit that is higher at the beginning and then decreases over time. However, the Greens as coalition partners have already made it clear that they WILL not result in any reduction in salaries. It is also likely that the unemployed will start out with more money than they do now, and then unemployment benefits will gradually decrease to current levels. Unemployment benefit is usually 55 percent of the last salary, plus there are supplements such as for families. In unemployment assistance, you receive around 51 percent of your most recent income.
But if unemployment benefits are increased, for example to 65 or 70 percent, that would increase the cost of unemployment insurance, which is already in deficit. Temporary redundancies would become more expensive and attractive. It is common practice, especially in seasonal industries, to report employees as unemployed in the event of short-term economic downturns with a promise of reinstatement and to rehire them when beds or order books are full again. The Chamber of Labour, for example, proposes that companies should bear the cost of unemployment benefits in the first month of unemployment. In this way, this practice of short-term termination and reinstatement can be counteracted.