Not competitive

Agenda Austria is concerned about rising wages

Agenda Austria believes that collectively agreed wages in Austria are rising too sharply (symbolic image).

(Bild: stock.adobe.com - magele-picture)

The liberal economic think tank Agenda Austria is concerned that wages in Austria are rising too much. This would cause domestic companies to lose competitiveness. This year, collective wage increases would already amount to around 8.5 percent.

In the eurozone, the average increase is only 4.6 percent. The reason given for the difference is inflation, as the higher wages are based on the average inflation rate of the past twelve months. According to Agenda Austria, no other European country handles this so consistently. At the same time, Austria's inflation is currently higher than the value in the eurozone. In May, the figures were 3.4 percent (Austria) and 2.6 percent (eurozone).

"Stagnating productivity"
 Since last year, collectively agreed wages in Austria have risen almost twice as fast as in the eurozone, according to the liberal economic institute. The team refers to figures from the Austrian National Bank and the European Central Bank.

There is talk of "serious consequences", as Austria is losing competitiveness due to sharply rising unit labor costs and stagnating productivity. "Austria needs to start thinking about whether the way it sets wages needs to be adapted to that of competitor countries. The domestic business location has always been defined by quality, but we will not be able to afford higher wages than our direct competitors in the long term," says Agenda Austria boss Franz Schellhorn.

In the international ranking of the Lausanne business school IMD, Austria recently came 26th out of 67 countries assessed.