Recommendations by the OECD and EU on Employment Policy: The Austrian Perspective
In essence, the OECD's labor market policies designed to reduce unemployment in Europe derive from the conviction that the educational systems and the labor markets have not adjusted fast enough to the structural change induced by technological innovation. In addition, the EU points to the slow increase in capital outlays and weak economic growth. At the present time there are 35 million unemployed in the OECD countries, with almost 20 million in the EU. In the first quarter of 1994 the unemployment rate in the OECD countries was 8 percent, and as high as 11.2 percent in the EU. These figures show that the developed industrialized countries, especially the EU countries, were unsuccessful in fighting the problem of unemployment, a problem that became serious in the wake of the first oil price shock of 1974. During the seventies, Austria managed to prevent the unemployment rate from rising, but during the eighties it shared the experience of the other economies: unemployment rose as a consequence of the recession of 1980/81 and the protracted structural adjustment problems. In the first half of 1994, 229,400 persons were registered as unemployed, i.e., 6.2 percent of all persons active in the labor market (7 percent of dependent labor). The unemployment rate according to the OECD guidelines (census data) was 4.5 percent. The persistence and seriousness of the problem of unemployment prompted the OECD as well as the European Union to closely analyze those factors to which the rise in unemployment and its long-term nature can be attributed, and to develop labor market policies which might enable the industrialized countries to regain the path to full employment (OECD, 1994, EU White Book, 1993). In essence, the OECD's labor market policies designed to reduce unemployment in Europe derive from the conviction that the educational systems and the labor markets have not adjusted fast enough to the structural change induced by technological innovation. In addition, the EU points to the slow increase in capital outlays and weak economic growth. The solution proposed for labor market problems, therefore, is a growth scenario based on investment into the infrastructure. The financing of the proposed mega-projects seems hardly feasible, however, given the restrictive stance of fiscal policy of individual countries and of the EU as a whole, and given the high level of interest rates. The OECD's policy recommendations focus on education and on-the-job training, retraining, adult education, the efficiency of employment exchanges, and active labor market policies designed to integrate the long-term unemployed. In Austria, the implementation of these programs requires changes in institutional structures and a shift in government programs. The OECD as well as the EU propose a cut in non-wage labor costs in low-wage industries, sufficient differentiation in minimum wages, and a reassessment of social security transfers, particularly of unemployment insurance payments. These changes should increase the financial incentive to the unemployed to take up work.
Beschäftigungspolitische Empfehlungen der OECD und der EU aus österreichischer Sicht; Recommendations by the OECD and EU on Employment Policy: The Austrian Perspective
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