European Employment Observatory. Ad hoc request: Incomes and Wages in the Health- and Social Service Sector in Austria

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1 European Employment Observatory Ad hoc request: Incomes and Wages in the Health- and Social Service Sector in Austria Ferdinand Lechner, Petra Wetzel May

2 1 Employment and employment prospects The health- and social service sector is a dynamic sector: Between 2004 and 2012 the number of employees and self-employed persons rose, based on LFS data, by around 20%, compared to a plus of around 10% in all economic sectors in Austria. Most of the persons working in the health- and social service sector are employees (92.1%, see Table 1), nevertheless the number of self-employed showed a stronger growth in recent years (+28% between 2004 and 2012, employees: +22%). Table 1: Occupational status in the Health- and Social Service Sector (in 1 000), annual average 2012 Occupational status absolute relative Employees 363,8 92.1% Wage Earners 44,8 11.3% Salaried Employees & Civil Servants 319,1 80.8% Self employed/family workers 31,2 7.9% Total 395, % Source: LFS 2012 These dynamics are expected to continue over the next years and decades. The increasing demand for health and care professions stems from the demographic change and the rising life expectancy. According to the mid-term employment forecast of WIFO 1, employment growth until 2016 is mainly driven by the increase of employees in health, social services and care professions. Between 2010 and 2016, the number of employees in white jobs will increase as follows: care and care related professions (e.g. child care, home and family care) by health care and obstetrician professions by social care professions (e.g. elderly care, care of disabled, social counselling) by medical assistants (e.g. physiotherapist, speech correctionist, dietary adviser) by The Reform Committee Care (Reformarbeitsgruppe Pflege, 2012) refers to a prognoses, predicting that the number of full-time equivalent persons in the sectors elderly care and care (Altenpflege und Betreuung) will rise from around to in 2025, where all sectors (stationary, mobile services etc.) will be affected. The highest increase is expected for stationary short-term care and semi-inpatient services. 1 2 Horvath, Thomas/ Ulrike Huemer/ Kurt Kratena/ Helmut Mahringer (2012): Mittelfristige Beschäftigungsprognose für Österreich und die Bundesländer - Berufliche und sektorale Veränderungen 2010 bis 2016, Vienna Hochrechnung aus Daten der GÖG - Kostenprognose der Dienstleistungen in der Langzeitpflege in Österreich von 2010 bis

3 2 Working conditions According to Schneider et al (2012), employment in health care, social service professions and child care is characterised by the following conditions: a relatively high level of workload with physical and psychological pressure (Statistik Austria 2009a, c.f. Hofer 2002, ÖBIG 2006, ÖBIG 2007, Poulsen 2009, Brunner et al. 2010, Papouschek 2011), overtime and extra work, weekend work, night work, a high share of part-time work, which does not allow for a good work-family balance due to the working time arrangements (Simsa 2004, Krenn et al 2010), a high level of willingness to continuous training and a high participation rate of continuous training with a low share of continuous training during the working time (cf. Statistik Austria 2009b), a generally high level of job satisfaction and in parallel a high level of dissatisfaction with working conditions (cf. Brunner et al. 2010, Fuchs/Trischler 2008, ÖBIG 2006, Simsa 2004, Hofer 2002). 3 Wage regulation The main tool for the wage regulation for health and care professions is the wage agreement of the Social Economy Austria ( BAGS-KV ), which is the association of employers for health care and social professions. This agreement regulates employment contracts of about employees. About of them are employees in about 310 institutions that are members of the Social Economy Austria, additional are included by statute of the wage agreement. A major challenge for this wage agreement is its validity for different fields of work, such as health care, social care, work with disabled people, child care and youth welfare, psycho-social care work and active labour market services. Despite structural similarities of the work in these fields, a lot of varieties made the creation of a common wage agreement difficult. These varieties have their origins in regional disparities and differences in service provision and in the financing institutions. These determining factors required many transitional regulations, which will end only in 2019 in a common minimum wage structure. Until then, differences in regional and professional aspects will persist. Experiences with the implementation of the wage agreement show that purchasers of the services see the agreement level of wages and rights not as a minimum but as a maximum level. This puts pressure on institutions which pay wages higher than the BAGS-level. In some areas (e.g. working time arrangements, travel expense allowances, extra pay etc.) the detailed regulation lies within the competence of the respective organisation. The remuneration of management tasks is regulated only for a few professions (e.g. management of socio-economic enterprises, head of ward in hospitals etc.). But the correct remuneration grouping often leads to conflicts. 3

4 Table 2: Wage structure of professions subject to BAGS-KV Profession Remunerati on group (gross) monthly wage (as of 1st of February 2013) for 38 hours weekly working time in Euro Duration of professional service 1-2 years 9-10 years years Home help , , ,80 Nursing auxiliary , ,40 Carer in an old s people home , , ,30 Social carer for elderly care (with diploma) Social care workers in labour market integration projects Graduate nurse Kindergarten pedagogue , , , , , ,33 Higher medical technical service Care specialist for disabled people , , ,80 Source: BAGS-KV 2013, Basic wage table The wage agreement of the Social Economy Austria doesn t cover employees who are employed according to the provincial regulations in the field of social welfare and work with disabled or in private care-facilities. In consequence, there is a relatively broad wage interval within a certain profession. The following table shows the variety e.g. for Kindergarten pedagogues using the example of the province of Styria: The wage level in BAGS-members institutions is higher than the minimum wage level in private kindergarten and also higher than in provincial kindergartens e.g. in Styria. Except for very long-term employees of public provincial kindergarten in Styria the wage is higher in BAGS (+10.7%) or private kindergarten (+20.7%). Table 3: Wage level for Kindergarten pedagogues in different work contracts Duration of professional service 1-2 years 9-10 years years Institutions under BAGS-KV 2 005, , ,33 Monthly minimum wage according to the BMASK regulation for private 1 943, , ,10 child care facilities Public servant (VertragsbediensteteR) according to the public service wage structure of Styria 1 759, , ,90 Source: BAGS-KV; Federal Law Gazette 432/2012; Wage tables of Styria 4 Earnings in the social and health care sector Based on the Structure of Earnings Survey a precise and comparable picture of earnings in different economic sectors, occupation etc. can be gained. The gross 3 Please notice, that the following economic sectors are included in the survey: sections B-N and P-S. 4

5 hourly earnings (excluding overtime) of employees in enterprises with at least 10 employees was 15 Euro (mean) respectively Euro (median). Ranked by the economic activity it s obvious that a) the human health and social work activities sector is midrange and that b) there are considerable differences between health and social activities (cf. Figure 1, Figure 2). The earnings in residential care 4 / social work activities (without accommodation) 5,6 correspond to about 80% of that in human health activities 7. In mean the gross hourly earnings (excluding overtime) in residential care / social work activities (without accommodation) are Euro (median: 12.37). Compared to total earnings, employees in residential care activities / social work activities (without accommodation) get 15% lower hourly earnings. In a monthly perspective the gross average earnings in residential care / social work activities (without accommodation) are Euro 8, the median is Euro. Compared to total monthly earnings in all sectors this means around 25% lower earnings. This is influenced by a comparably high share of part-time employees in this sector (nearly 60% compared to 27% in all economic sectors). Additionally, part-time employed in residential care / social work activities (without accommodation) have slightly lower hourly earnings (-6%) than full-time employed. Gender differences are not very pronounced: the hourly earnings of women in residential care / social work activities (without accommodation) correspond to around 95% of that of men. But one has to bear in mind that the share of male employees in this sector is rather low (around 25%). In an EU-wide perspective the levels of earnings in the human health and social work activities sector 9 in Austria generally correspond to the EU-average (cf. Figure 3), they are slightly above in case of women (12.24 compared to EU-26) and marginally lower for men (13.91 compared to EU-26) This division includes the provision of residential care combined with either nursing, supervisory or other types of care as required by the residents. Facilities are a significant part of the production process and the care provided is a mix of health and social services with the health services being largely some level of nursing services. This division includes the provision of a variety of social assistance services for the clients. The activities in this division do not include accommodation services, except on a temporary basis. Number of employees: This division includes activities of short- or long-term hospitals, general or specialty medical, surgical, psychiatric and substance abuse hospitals, sanatoria, preventoria, medical nursing homes, asylums, mental hospital institutions, rehabilitation centres, leprosaria and other human health institutions which have accommodation facilities and which engage in providing diagnostic and medical treatment to inpatients with any of a wide variety of medical conditions. It also includes medical consultation and treatment in the field of general and specialised medicine by general practitioners and medical specialists and surgeons. It includes dental practice activities of a general or specialised nature and orthodontic activities. Additionally, this division includes activities for human health not performed by hospitals or by practicing medical doctors but by paramedical practitioners legally recognised to treat patients. Number of employees: In the case of full-time: Euro (mean), Euro (median); part-time: Euro (mean), (median). No data available for residential care activities/ social work activities (without accommodation). 5

6 In respect to occupations the Structure of Earnings Survey provides information on the group of personal care workers 10, which are of special importance in the present context. Their average gross hourly earnings stand at Euros, in the case of women at Euros and for male the average is Euros. Compared to the total average of 15 Euro, once more the below average earning level becomes obvious. The level is just lower in the group of elementary occupations and some other occupations of service and sales workers. The Index of Agreed Minimum Wages 06 (basis: 2006 annual average = 100) measures the minimum wage trend in Austria. In March 2013 the index reached a value of The wage agreement of the Social Economy Austria ( BAGS-KV ) had a comparatively positive development, reflected in an index value of For the whole human health and social work activities sector the index value is below average (118.4) with different developments in respect to the occupational status. The most positive minimum wage trend can be found for qualified wage earners (124.2), the poorest development is observed for unqualified wage earners (119.6), civil servants (116.5) and salaried employees (119.4). The last two groups make up for around 80% of all employees in this sector. Beside the situation of employees, it is important to recognize that in this sector selfemployed activities are of relatively high importance. Based on the Labour Force Survey (2012) around self-employed and family workers are active in the human health and social work sector. According to the Ministry of Social Affairs in May business registrations for personal care existed, whereby around 70% were active (cf. bmask 2012). The number of self-employed care givers (PersonenbetreuerInnen), registered at the Social Security Institution, stood at around persons in (cf. answer to written question, 10490/AB, ). Two years earlier, in April 2010, the number used to be considerably lower with (cf. answer to written question, 5487/AB, ). Comparing this reported numbers of insured caregivers with the numbers of solely self-employed carrying out social work activities in as reported in the General Income Report with a value of a significant difference turns up. The reasons for this can be seen in several influencing factors e.g. no tax liability because of low earnings, no tax notification at all, parallel income from dependent employment, informal/family caregivers using the possibility of the preferential terms of selfinsurance and continued insurance under the pension insurance and, last but not least, a classification of self-employed care givers in the category of human health activities. Current statistics about the number as well as detailed information on earnings are not available. According to the General Income Report, the annual earnings before tax of solely self-employed carrying out social work activities in 2011 was Euro in the median, the average value was clearly higher with Euro. Nevertheless, this is a Personal care workers provide care, supervision and assistance for children, patients and elderly, convalescent or disabled persons in institutional and residential settings. No explicit reference date (e.g. monthly average, reporting date) is given. 6

7 significantly lower income level than in the human health activities (median: Euro, mean: Euro), which underlines the importance to distinguish between the different activities in the human health and social work activities sector. Compared to the total values of all sectors the earning levels in the median are around 17% lower, measured at the arithmetic mean the difference is about -40%. Having a look on the gross annual income of employees, data indicate a comparably poor earning situation of self-employed. The annual income of employees in residential care / social work activities is Euro (median) respectively (mean). Table 4: Annual earnings (before tax), of solely self-employed, 2011 median mean Number of persons Human health and social work activities sector Human health activities Residential care Social work activities (without accommodation) Total (all economic sectors) Source: General Income Report, 2012 Table 5: Gross annual earnings of employees, 2011 median mean Number of persons Human health and social work activities sector Human health activities Residential care Social work activities (without accommodation) Total (all economic sectors) Source: General Income Report, Conclusion In order to meet the rising labour force demand in the health- and social service sector regarding several aspects, comprehensive measures would be necessary. As the Reform Committee Care (Reformarbeitsgruppe Pflege, 2012) already concluded, such measures include vocational (re)training and activities maintaining employability. In this respect, the implacement foundation in the care service sector should be continued in order to cover the rising demand for skilled labour in health and care professions. The provincial PES offices offer vocational training measures in the field of care services. Target groups are job searchers with job interests in these professions. The training is carried out in close cooperation with care service providers which notify respective vacancies. From 1 st of July 2013 on, the professionals/skilled workers scholarship scheme enables training of low and medium skilled workers or jobseekers in occupations with labour demand. Also health and care professions are eligible for that subsidised training. 7

8 Furthermore the question of quality of work in this sector (e.g. below average earning opportunities or gender inequalities) should gain more attention to enhance the attractiveness of care professions. As health and care services are feminised employment segments, efforts should be undertaken in order to attract more men in care activities. Information for boys and men about caring careers and the promotion of male care role models might inspire men to take up the respective professions. A national strategy, like in the field of green jobs (Masterplan Green Jobs), could be developed also for white jobs. Such a Masterplan could by the involvement of different stakeholders and actors analyse current national and regional programmes and measures, frame further challenges and define goals and targeted instruments and specific measures. 8

9 6 Annex Figure 1: Gross hourly earnings (mean) by selected economic activities, Total D ELECTRICITY, GAS, STEAM AND AIR CONDITIONING SUPPLY K FINANCIAL AND INSURANCE ACTIVITIES J INFORMATION AND COMMUNICATION M PROFESSIONAL, SCIENTIFIC AND TECHNICAL ACTIVITIES P EDUCATION B MINING AND QUARRYING C MANUFACTURING QA Human health activities L REAL ESTATE ACTIVITIES R ARTS, ENTERTAINMENT AND RECREATION F CONSTRUCTION Q HUMAN HEALTH AND SOCIAL WORK ACTIVITIES S OTHER SERVICE ACTIVITIES H TRANSPORTATION AND STORAGE E WATER SUPPLY; SEWERAGE, WASTE MANAGEMENT AND REMEDIATION ACTIVITIES G WHOLESALE AND RETAIL TRADE; REPAIR OF MOTOR VEHICLES AND MOTORCYCLES QB Residential care activities / Social work activities without accommodation N ADMINISTRATIVE AND SUPPORT SERVICE ACTIVITIES I ACCOMMODATION AND FOOD SERVICE ACTIVITIES Quelle: Statistics Austria 9

10 Figure 2: Gross hourly earnings (median) by selected economic acitivities, Insgesamt D ELECTRICITY, GAS, STEAM AND AIR CONDITIONING SUPPLY K FINANCIAL AND INSURANCE ACTIVITIES J INFORMATION AND COMMUNICATION M PROFESSIONAL, SCIENTIFIC AND TECHNICAL ACTIVITIES C MANUFACTURING QA Human health activities P EDUCATION B MINING AND QUARRYING L REAL ESTATE ACTIVITIES F CONSTRUCTION Q HUMAN HEALTH AND SOCIAL WORK ACTIVITIES H TRANSPORTATION AND STORAGE QB Residential care activities / Social work activities without accommodation S OTHER SERVICE ACTIVITIES E WATER SUPPLY; SEWERAGE, WASTE MANAGEMENT AND REMEDIATION ACTIVITIES R ARTS, ENTERTAINMENT AND RECREATION G WHOLESALE AND RETAIL TRADE; REPAIR OF MOTOR VEHICLES AND MOTORCYCLES N ADMINISTRATIVE AND SUPPORT SERVICE ACTIVITIES I ACCOMMODATION AND FOOD SERVICE ACTIVITIES Quelle: Statistics Austria 10

11 Figure 3: Mean hourly earnings EU (Purchasing Power Standard), total, mean Luxembourg Ireland United Kingdom Denmark Netherlands Italy Belgium Germany (until Spain Cyprus Finland Sweden France Austria Slovenia Malta Portugal Poland Czech Republic Estonia Slovakia Hungary Lithuania Latvia Bulgaria Romania Source: Eurostat: earn_ses10_12 11

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