Job market
How does the minimum wage affect Austrian companies?
- Job market
- SMEs
- Collective agreement
- Minimum Wage
- Austria
The introduction of a minimum wage in Austria could have positive effects on income distribution and poverty risk, while the overall economic impact would be minimal. Affected sectors include small businesses in floristry, food production, and laundry.
The role of collective agreements in Austria
There is no nationwide statutory minimum wage in Austria. Instead, the wage floor is primarily regulated by collective agreements (Kollektivverträge), affecting around 95% of employees and often setting minimum wages at least €1,700 gross monthly, equivalent to an average monthly salary of €1,983 gross over 14 months.
Impacts of a nationwide minimum wage
A 2017 WIFO study showed that introducing a nationwide minimum wage of €1,500 to €1,700 would particularly benefit low-income individuals. An increase in income would reduce poverty risk and improve income distribution.
Economic effects and challenges
According to the WIFO study, the introduction of a minimum wage would have little economic impact, as production and employment would not be significantly affected. However, small and medium-sized enterprises (SMEs) might be disproportionately burdened, with minimum wages potentially rising by about 20% more.
Affected sectors and companies
Especially SMEs in sectors like floristry, food production, and laundry are affected by higher minimum wages, as 90-95% of businesses in these sectors have fewer than nine employees. These small companies feel the increase more acutely and could face greater financial pressure.
Frequently Asked Questions
In Austria, minimum wages are traditionally regulated by collective agreements to enable flexible solutions for different sectors.
Collective agreements often set minimum wages of at least €1,700 gross monthly, which corresponds to an annual salary of €1,983 per month with 14 payments.
According to the WIFO study, the overall economic impact would be minimal, but small and medium-sized enterprises could be disproportionately burdened.
Sectors like floristry, food production, and laundry, where many SMEs operate, could be more financially burdened by a minimum wage.
This post was AI-assisted and editorially reviewed.
Sources
Open position that's difficult to fill?
Talk to us about your vacancy. We’ll honestly tell you what the market offers – and how we can fill it.