Austria 2025 – A Segmented Labour Market and Weak Pay Growth in Austria

The weak overall growth of employed labour income in the past 15 years has in part been driven by particularly low wage increases in certain segments of the workforce. A substantial proportion of employees, growing since the outbreak of the economic and financial crisis of 2009, is affected by unstable employment. For those individuals pay has grown at a significantly slower rate than for workers in stable employment. Apparently they benefit less from the pay increases set in collective bargaining agreements, since they frequently change in and out of employment. Unstable employment and low wages are frequent among foreign workers, in particular among those from Eastern EU countries. The greater inflow of migrant labour since the opening of the labour market for the Eastern European member countries has dampened wage growth. However, the wage gap between workers with stable and unstable employment was larger among Austrian nationals than among foreigners.