Cuts in the AMS budget endanger labor market integration in Upper Austria

Social enterprises are warning of impacts that threaten their existence and are calling on the federal government to act quickly

Linz (OTS) – Social enterprises have been successfully supporting the (long-term) unemployed for decades Employment, advice and qualification when re-entering the labor market in Upper Austria.

Socio-economic companies, women’s vocational centers, work training and vocational training centers as well as specialized advice centers are a booster for the labor market and bear a high social and economic responsibility:

1. They bring people into employment and
2. thereby alleviating the acute labor shortage.
3. They counteract long-term unemployment and
4. thereby relieving the burden on the social systems.
5. They help formerly unemployed people pay back into the system and increase tax income.

Magdalena Danner from the Social Platform Upper Austria is worried about the rising unemployment figures in Upper Austria, which are increasing more than the national average. Danner warns: “Any lack of space in labor market services means fewer life chances for people on the margins of the labor market.”

Supported employment works

Die Labor market expert Gertrude Hausegger (prospect GmbH) knows about the problems that long-term unemployment brings with it: The psychological and social consequences of unemployment and unsuccessful applications lead to people no longer having confidence in themselves and withdrawing more and more. Financial losses are becoming increasingly noticeable. Professional networks that could be helpful when looking for work are increasingly dwindling and existing skills are rapidly becoming less relevant in a fast-moving world. For companies, a longer period of unemployment is often a signal of limited performance.

All of this means that this group of people can only benefit to a limited extent from high demand for workers. Social enterprises traditionally play a central role for the AMS in supporting people who have been unemployed for a long time: Unemployed people are referred to social enterprises by the AMS if the use of a traditional training offer or (subsidized) work in companies is not possible or has already been done (several times). ) were canceled. In these cases, it is important to specifically address the causes and/or effects of unemployment: These can be multiple problems and/or more intensive health restrictions and/or the psychological and social consequences of unemployment.

Gertrude Hausegger explains: “Through their offerings, social enterprises build bridges into regular employment for unemployed people who are at risk of exclusion in the labor market without targeted support: around 30% to 50% of participants are in subsidized employment – depending on the specific target group and specific offer back in employment.“

Further budget cuts are taking a toll

The financial resources for labor market policy services are mainly provided by the Labor Market Service (AMS). Social enterprises are important partners for the AMS in order to get people into sustainable employment. As early as 2024, 22 million euros less were available in Upper Austria. There is now a risk of further cuts of a nominal 5 million euros in 2025. In addition to the reduced funding, the social institutions were/will not be compensated for collective agreement increases and inflation-related cost increases.

Magdalena Danner explains: “Just to maintain the already greatly reduced level of activity in 2024, valorized 167 million euros would be required, so in reality a total of 11 million euros are missing in 2025. This means there is a risk of another cut of around 7%.“

There is in Upper Austria Support facilitieswho, with their services, their know-how and their knowledge of regional characteristics, etc., support unemployed people in their sustainable integration into the primary labor market. Around 20 of these social companies with labor market-integrative offers are combined in the Upper Austria social platform. For several weeks now, the social platform’s members have been pointing out the alarming and existence-threatening effects of renewed cuts. The uncertainty among the supporting institutions is enormous and has led to the need to collectively address the public. The social platform has requested an initial impact assessment of the threatened cuts. The cuts will be Layoffs among care staff entail and fewer places for job seekers in employment and for advice, they weaken the performance of socio-economic companies and threaten the continued existence regional locations and advisory services (for 1/5 of the providers).

Women’s projects in danger

She:works GmbH is the contact person for professional opportunities for women in Upper Austria. Central room. In the case of temporary employment opportunities and temporary employment, doors are opened for job-seeking women through cooperation with Upper Austrian companies from different sectors. Job-related qualifications and comprehensive workshops, including in the area of ​​digital skills, complement the offering. The career planning advice focuses on green jobs and women in technology (FIT).

Susanne Steckerl, Managing Director of she:works GmbH explains: “The announced cuts are hitting us hard – especially in our women’s vocational centers and our socio-economic operations. It not only means that we can offer fewer women from the central Linz area the support they need to gain a long-term and qualified career footing, but also that we are losing colleagues.“

The women’s vocational centers have a so-called “interannual” contract with the AMS Upper Austria and were recently asked to take into account a budget cut of up to 20 percent from July 1st.

Combat long-term unemployment with sustainability

Arbeitswelt GmbH is one of four social and circular economy companies in Upper Austria. Together they offer 300 transit jobs and 60 training jobs. The Volkshilfe Oberösterreich company supports young people and adults in (re-)entering the world of work – from finding a suitable apprenticeship, a new job to securing an existing employment relationship. In the social-economic companies (SÖB) of Volkshilfe there are temporary employment opportunities from the commercial area through storage and cleaning to the important area of ​​the circular economy (textile sorting, electrical appliances and bicycle processing, second-hand shops and e-commerce).

Martin Zwicker, Managing Director of Volkshilfe Arbeitwelt GmbH explains: “With our socio-economic companies (SÖB) we have the opportunity to raise awareness of the future areas of circular economy and sustainability among people who have a particularly difficult time on the job market. It is therefore doubly a pity if such austerity is set in this area. Especially because the promotion of socio-economic businesses in the circular economy and securing funds for SÖB are enshrined in the current government program.“

Zwicker reports that Volkshilfe Arbeitswelt had to close locations as early as 2024.

The Upper Austria social platform demands:

1. Quick action from the Austrian federal government to increase the AMS budget
2. Additional funding for the AMS Upper Austria budget for 2025 of at least 11 million euros
3. No cuts for AMS offers with “subannual” contracts (e.g.: women’s vocational centers)
4. Longer-term contract terms (at least 3 years) to increase planning security for social enterprises
5. Consideration of cost increases, KV increases and indexation

Questions & Contact:

Mag. Josef Pürmayr, +43 699 183 58 278, puermayr@sozialplattform.at