The Austrian Sozialpartnerschaft
The Austrian way under threat
In the current era of Sebastian Kurz and his New Austrian People’s Party (ÖVP) and perhaps facing its greatest threat since the foundation of the 2nd republic post WW2, the Austrian Sozialpartnerschaft (Social Partnership) remains a vital balance and stability mechanism and foundational structure on which Austria survives.
The Austrian Sozialpartnerschaft is a set of opposing interest groups enshrined as part of the state. They are the Wirtschaftskammer (WKO) (Chamber of Commerce ), the ArbeiterKammer AK (workers chamber) , The Landwirtschaftskammer (LK) (Agriculture Chamber ) , Landarbeiters Kammer (LAK) and the Österreich Gewerkschaften Bund (ÖGB) (Austrian Trade Union Federation). These chambers are democratically elected by their members. Entrepreneurs are members of the Economic Chamber (WKO) and vote in their elections. Workers are automatic members of the Workers Chamber (AK) and vote in their elections. . Likewise, trade unions and the Agriculture Chamber. These conflicting interest groups in this system attempt to achieve consensus through negotiation. For example, in Austrian wages and conditions are usually determined through sectoral collective bargaining, which takes place every year between the Trade Unions (ÖGB) and the Economic Chamber (WKÖ)
Although the roots go well before WW2 and there was significant influence before the formation of the Austro fascist regime of 1934. Austria instituted the modern Sozialpartnerschaft in 1946 to bring stability, cohesion, and consensus among society’s opposing interest groups going forward. Through a series of price, wage agreement’s the partners steadily gained influence with the heyday being in the 1970s during the Kreisky era. ÖGB chief Anton Benya and WKO chief Rodolf Salinger were the key players at this time, including coming to a stabilization agreement to control inflation agreeing to moderate wage and price demands. The partners remained hugely influential and a cornerstone of Austrian Politics as the Social Democrats SPÖ dominated Austrian politics until 1999. The Austrian People’s Party ÖVP and Freedom Party of Austria FPÖ finally broke the SPÖ stranglehold of the chancellorship between 1970 and 1999. This marked the first real threat to the influence and power of the Social partners as under Chancellor Wolfgang Schüssel (ÖVP) and finance minister Karl Heinz Gräser (FPÖ) Austria had its first real neoliberal government.
In the end, despite being pushed to the side in this era of privatization, corruption, scandal, and eventually last year the imprisoning of finance minister Grasser, the social partners re-emerged as a force with the return of the SPÖ in Government and the Bad Ischl dialogue which aimed to formalize future dialogue between the partners and federal Government. Following the financial crisis in 2008, the social partners played a key role and were perhaps the primary factor the Austrian economy didn’t suffer as badly as others starting successful schemes like Kurzarbeit (short-term work ).
Importance to Austrian Society
The success of the Social partners has been to provide economic stability and growth throughout the post-war era. Between 1970 and 1999, the average unemployment rate in Austria was 3,9% as opposed to an E.U. average of 6.4%. For business, they can make more accurate investment decisions as they can avail of the expertise of the Economic chamber WKO who is in dialogue with the government and the other partners. For workers they are both represented by the trade unions ÖGB with 1.2 million members and the Workers Chamber AK with 3.3 million members currently, the latter being a compulsory membership with dues paid automatically. Job stability is provided by the sectoral collective bargaining with agreed contracts for employees based on qualifications and experience. For example,e there currently exists no mandated federal minimum wage in Austria as it is negotiated by sector between the WKÖ and the ÖGB.
The stability also comes from the formalized nature of this system. All societies have a variety of opposing interest groups who lobby governments for their specific interests, it’s just that often in the neoliberal era many countries no longer even acknowledge these opposing interests and worse still undermine or ignore the right of workers to have a seat at the table. The war on trade unions that Thatcher and Reagan waged in the U.K. and the U.S. for example never took place in Austria. Another reason is there was no need to wage this war. In The U.K. for example going on strike was the only effective method of getting demands met for the trade unions so, in the end, the right waged a full-on assault under Thatcher. In Austria, because the Unions had an enshrined seat at the table and were in constant dialogue with the governments, they have largely discouraged and even suppressed strikes. It is this aspect of the SozialPartnerschaft that gets the most criticism from the left.
The left-wing critique of the Sozialpartnerschaft is 2 fold. Firstly, it is undemocratic as it can undermine the regular democratically elected Government. secondly, it has created a far more passive and less militant trade union movement which is part of the establishment instead of being staunchly opposed to it. They can encourage wage moderation in exchange for job stability. On the right and especially the far-right FPÖ it is criticised for both being undemocratic and impeding the so-called “Free market”. The FPÖ is the biggest voice in a campaign to remove the compulsory membership of the AK for example, a move that would drastically undermine the partner’s power and influence.
Another major criticism comes from the smaller parties which also includes the FPÖ. as the ÖGB and AK are dominated by the Social Democrats fraction in elections and the WKÖ are dominated by the ÖVP then it leaves all the other parties without a social partner representation when in Government. For example, in the current Green ÖVP coalition, you have as normal an ÖVP ran WKÖ to work with and support the government with introducing pro-business measures but the green party has no official backers in the partnership leaving them weak and further lacking any influence. The problem is the existence and continued power of the social partners undermine 3rd parties to truly emerge as dominant in government.
The 2nd major assault on the Partnership began in 2017 with the election of Austrian neoliberal “wunderkind” Sebastian Kurz who initially went into coalition with the far right. Kurz rebranded his party the New People’s party and declared they are now a centre-right party as opposed to a centrist party. This led to the brief but hugely destructive coalition between the centre-right and far-right and the most right-wing government in the post-war era. The social partners pushed to the edge and their new weakness was shown by the Government stripping labour regulations by making it legal to work up to 60 hours a week. Up from the previous 48-hour limit and also removing the compulsory double time for overtime. This coalition ended in scandal in 2019 but Kurz reemerged strengthened in a new coalition with the Greens in a government that was the first in the post-war era to have no representatives from the social partners.
The resurgence in the pandemic
Then along came the Corona pandemic, and everything changed again. The government embroiled in constant scandal have also been directionless at this moment. They immediately once again looked to the social partners for help and with the reintroduction of Kurzarbeit, they have reduced the negative effects of the government’s poor handling of the crisis somewhat. Throughout the pandemic and until now it has been the AK and ÖGB suggesting and creating potential schemes to create jobs and employment while also campaigning for an increase in social benefits, unemployment money, and fair working conditions for employees. The government is putting all their effort into a spin campaign to deflect heat both off their constant corruption scandals but also their poor handling of the pandemic. While ÖGB chief Wolfgang Katzian campaigns for more unemployment money and declares the social state the “here “ of the panic, Sebastian Kurz is putting all his effort into disempowering the state corruption investigation agency. It has become ever more crystal clear in Austria both the importance of but also the necessity of a successful and powerful Sozialpartnerschaft as at the very least a bulwark against the continuing neoliberal assault on both them and democracy in Austria.
Future of the Sozialpartnerschaft
As long as the New People’s Party movement under Sebastian Kurz remained in charge, then the influence and existence of a strong social partnership and social state will remain under grave threat. The Kurz movement is a very simple project, backed by the super-rich, whose goal is obvious. Undermine and eventually dismantle or destroy all the structures and institutions which have made Austria as stable and successful as it is. His movement is deeply unpatriotic, regardless of his team’s branding. It is thus ever more important that the social partners remain strong as a bulwark against such a movement as they remain and will remain the biggest obstacle the current neoliberal movement faces in implementing their plan to Americanise Austria. yes, indeed it is a deeply flawed setup with many issues like anything else. But it is and will remain for the foreseeable an essential for Austria to remain a broadly at least social-democratic country where the common good still matters.