| VIENNA, June 26
VIENNA, June 26 Sebastian Liedl is 17, and in
half a year will be a fully qualified employee at the Austrian
steel group Voestalpine, where he can look forward to
a starting monthly wage of about 2,000 euros ($2,600).
Unlike his contemporaries in Greece, Spain or Portugal,
Liedl has never feared unemployment. He always knew he wanted to
follow in the footsteps of his father and grandfather at Voest,
where he is part of an extensive apprenticeship programme.
"I decided on Voest right away," said Liedl, who has been
training since the age of 15 for an office job at the
steelmaker, starting on 530 euros a month. "I like it a lot."
Liedl is benefiting from a long tradition of cooperation
between labour and employers in Austria, which - mindful of how
mass unemployment helped fuel the rise of fascism - places great
importance on getting people into jobs and keeping them there.
Culturally, not much has changed since Social Democrat
ex-chancellor Bruno Kreisky famously said in 1990: "A couple
billion more in debt causes me fewer sleepless nights than a few
hundred thousand more jobless would."
It's a model that European Union leaders will be looking to
when they decide this week how best to use 6 billion euros
earmarked for tackling the bloc's soaring youth unemployment.
At 4.9 percent, Austria has the lowest jobless rate in the
European Union and the second-lowest youth unemployment, which
stood at 8.0 percent in April, as measured by the EU statistics
agency Eurostat. That compares to 63 percent youth unemployment
in Greece and 56 percent in Spain.
When one of Austria's biggest building firms, Alpine Bau,
went bust last week, the government went into overdrive, coming
up with a 1.5 billion euro stimulus package to create more
In Spain, home of Alpine's parent FCC, the news
barely registered in an environment of 27 percent unemployment.
Meanwhile, the Austrian aircraft parts supplier FACC
, unable to train enough skilled staff through its own
apprenticeship scheme, advertised in Spain for engineers. It got
a thousand applicants for four places.
SPENDING ON JOBS
"Unemployment in Austria has always been low. That is linked
to an overall consensus in politics and society," said Andreas
Woergoetter, senior economist at the Organisation for Economic
Co-operation and Development (OECD).
Foreign dignitaries often visit state-financed training
workshops - which catch young people who do not secure a spot in
private apprenticeship schemes - to seek clues to the Austrian
job miracle, which confounds many free marketeers.
"They are shocked to find out it costs 14,000 to 16,000
euros a year for each spot," said Herbert Buchinger, chairman of
the government's employment service, AMS.
The service guarantees any young person a job offer,
targeted training or state-subsidised employment within six
months of their registration as unemployed.
Private companies may spend even more: Voestalpine, which
has been hiring apprentices since 1940, invests 70,000 euros in
each young person over the course of up to four years' training.
Hubert Haider, who coordinates the apprenticeship programme
at Voestalpine Steel in Linz, says it is worth it. Up to 90
percent of apprentices are still with the group five years after
completing their training.
"The whole company supports it, all of the management
support it, and it is important for example that Dr (Chief
Executive Wolfgang) Eder personally hands over the certificates
at the end of the training," Haider said.
Austria spends more than half a billion euros a year on
measures to promote jobs for people aged 15 to 24, of which
around 150 million comes from the private sector. In all, its
employment service has a budget of 1 billion euros for job
It gets a head start by focusing on young people aged 15 or
16. "They are doing real work, not drilling fake holes into a
fake wall somewhere," said the OECD's Woergoetter.
Austria benefits from its close economic ties to European
powerhouse and neighbour Germany, and from a structure that
allows the federal government to implement employment policy
centrally without having to go through regional authorities.
Buchinger said Austria made a critically important policy
decision in the 1970s to focus on supplying the German
engineering and auto industry rather than develop its own car
sector, thus piggybacking on its neighbour's export might.
It also used its geography and historical ties with emerging
economies in the former communist east to tap growth markets
there. "We took part in the reform hunger in these countries."
Like Germany, Austria handles pressure on jobs during
economic slumps by subsidising companies to keep staff on
payrolls at reduced hours. This means employers have skilled
workers on hand when an upturn comes.
But unlike Germany, Austria makes it relatively easy for
companies to dismiss workers, who on average change jobs every
three years. "Employers in Austria are ready to hire someone
because it is easier to get rid of him again," said Buchinger.
Austrian workers have also been restrained in their pay
demands, keeping unit labour costs competitive at a time when
they have rocketed in some peripheral euro zone countries. There
is no minimum wage.
But despite its sparkling headline numbers, the Austrian job
machine still has a few shortcomings.
Few Austrians work until the standard retirement ages of 65
for men and 60 for women, which means pensions help take up the
employment slack. The actual retirement age is 57.6 years on
average, although Austrians tend to start work young.
More than 70 percent of women work, but a lack of day care -
especially for children under three and outside of urban centres
- means nearly half of women work only part-time.
Still, Buchinger said Austria has lessons for others.
"I would tell unions not to fear deregulation of job
protection in labour contracts. You mustn't see only the risks
of a dynamic labour market, but also the opportunities."
($1 = 0.7637 euros)
(Additional reporting by Alexandra Schwarz-Goerlich and
Angelika Gruber; Editing by Kevin Liffey)