krone.tv report

How lockdowns are still threatening livelihoods

A Viennese entrepreneur talks about her fight for survival, family man David B. is up to his ears in debt and the number of insolvencies is set to triple in the coming years. The consequences of corona, a year and a half later.

Waiter was his dream job. David B. was successful in this profession for years. He likes the contact with guests and good food. His last day as a waiter was March 15. "I was working in the city center at the time," says the family man in an interview with krone.tv, "and suddenly there were no more people around. My colleagues and I then realized that something bigger was coming our way."

First rent arrears, then apartment gone
He was sent on short-time work. At first he was optimistic and felt secure thanks to the government's measures, but he soon had a rude awakening. The short-time work meant he earned less, while the costs remained unchanged - based on the time before corona. So the bills piled up. "After the second lockdown, hope was gone for good. You pay rent, then there's not enough to pay the rent, you lose your apartment - that's what it's come to."

Overtime every day - even on Saturdays and Sundays
David B. turned his back on the dormant catering industry with a heavy heart and started working over 70 hours a week. "All jobs that I would never have done or considered before." Food delivery driver, cab driver. In desperation, he took on any job just to make ends meet. "I worked overtime, I worked on Saturdays, on Sundays." Being unemployed was never an option for David B. But all the hard-earned money only temporarily reduced the negative balance in his bank account. "I only lived for bills and my expenses, I had nothing left." 

After retraining, there was a happy ending after all. In exactly three months, the mountain of debt of several thousand euros was history thanks to a higher salary. "I managed it on my own by working hard," he says, not without pride. "If you want something, you can do it."

David B. is one of many ex-waiters who are now so desperately needed in the restaurant industry, as most of them have since moved on in their careers.

Speaking of gastronomy. It's lunchtime in the pub garden of the "Bastei Beisl" near the Stubentor. Peter Dobcak, chairman of the catering division for Vienna at the Chamber of Labor, scans the QR code and registers with his cell phone. For him, subsidies have saved the livelihoods of many landlords. "To prevent a major wave of bankruptcies, we told the government right from the start: 'Please don't let the subsidies end abruptly, but let them run out slowly.' So it was always successively adjusted and extended."

Staff shortage is Gastro
 's biggest challengeBut without enough staff? "The staff shortage is currently the biggest challenge facing the industry. We need to make the industry more attractive again and rethink the support system so that people don't even think about whether it pays to work because I get enough money from the state anyway." 

The "Bastei Beisl" is run by Erwin Scheiflinger and his family in the third generation. Scheiflinger has worked here since 1978. His sympathy goes out to new openings and takeovers: "There are many who are very, very poor, who took over or bought a new business before the pandemic and have fallen down because of it. These are hardship cases. But if someone goes and cheats the state, they can't expect the state to help them out of the crisis. Anyone who doesn't pay into the community has nothing to expect from it." 

"A kitchen maid won't get better if she gets 2,000 euros"
In his opinion, the staff shortage will sort itself out again. "I'm looking for two employees myself and it's almost impossible." Many, says the landlord, "are now used to staying at home for seven months." Could a better wage help? "We pay above the collective agreement. That doesn't make a kitchen maid any better if she gets 2,000 euros. But if she does a good job, she'll get more."

"We are currently living in an upside-downinsolvency world"
Alexander Klikovits from KSV1870 advises entrepreneurs whose prospects are poor to initiate insolvency proceedings sooner rather than later: "We are currently living in an upside-down insolvency world. On the one hand, we are facing Austria's biggest economic crisis since the Second World War. On the other hand, insolvencies are at a level last seen 40 years ago. The current economic development and insolvency figures are in stark contrast to each other." 

Rising insolvencies 2022-2023
Klikovits emphasizes that not all companies have been saved as a result. "The insolvency of many companies has only been put on the back burner. You could speak of a rescue if companies turn themselves in on time. We assume that some insolvency candidates have matured in the course of the pandemic situation that have not yet found their way to the insolvency judge."

This delay will become apparent in the coming years: "Next year, we will certainly feel the knock-on effects of this year's missed insolvency activity. We expect to see this continuous increase in insolvencies over the next two to three years."

Expanded shortly before the pandemic - branch now closed
Many entrepreneurs are still suffering from the consequences of the lockdowns. High expenses despite closures made doing business extremely difficult. Barbara Lukas is a boutique owner. She expanded shortly before the pandemic and opened a second store in Baden, which is now closed. Her second location will now have to wait. The future of the first boutique is already in the stars. It is located in Vienna's Margaretenstraße and is very popular with fashionistas in the Grätzl district.

"I didn't receive any funding until November 2020, only the hardship fund. But what is one 500 and one 1000 euros if we have 5000 euros worth of goods in a box - which is not taken into account anywhere?" From November onwards, she was then entitled to a turnover replacement because she had two stores in the same period. "But because I'm a sole trader and everything is on my tax number, it wasn't verifiable for the tax authorities."

She was not allowed to defer taxes because she was not affected. "A financial advisor told my tax consultant: 'What does she want with the turnover, she can't be affected? A world collapsed for me. Because the employees weren't there, because I couldn't register for short-time working. If I'm closed, I can't carry salaries for months." 

"Working Monday to Saturday without earning"
However, our system also fails without coronavirus for small businesses, says Lukas. "If I divide what I pay in social security contributions by years and months, I have to say that I haven't paid myself that much each month. Through all my work, my efforts, my time, my worries and my risk, I earn 5000 to 7000 euros in sales tax here. I'll pay that if I'm closed for five months and can't earn anything for a year. This means that when the next lockdown comes, I will have worked Monday to Saturday for the next year without being able to earn anything."

But Lukas is not only an entrepreneur, she is also the mother of a small child. She homeschooled her older siblings and was worried about the job market for her eldest. Nevertheless, she never gave up. 

The pandemic has taken its toll on many. And it is far from over.