The head of AMS warns of an economic recession in Austria due to the Iran crisis
Johannes Kopf, the Director General of the Austrian Labor Market Service (AMS), warned of serious repercussions for the Austrian economy and labor market if tensions related to Iran continue for a long time, stressing that the current situation poses a real threat that could lead the country into a new economic recession, according to what the Austrian Press Agency (APA) reported from his statements in a media interview.
Johannes Kopf explained that the current international crisis represents “a serious situation that must be taken seriously,” noting that its continuation could lead to a clear economic deterioration, as he predicted that if the crisis lasts for a long time, Austria could return to a deeper recession, which would directly affect the labor market and employment levels in the country.
In this context, the head of AMS indicated that labor market policy might have to take exceptional measures to address these developments, including reactivating the subsidized short-time work scheme known as Kurzarbeit, a measure previously used during economic crises to preserve jobs. He also did not rule out the possibility that major companies like Austrian Airlines (AUA) could be affected if energy costs continue to rise, although he noted that current fuel prices alone are not yet sufficient grounds for taking such steps.
In addition to short-term risks, Johannes Kopf pointed to long-term challenges facing the labor market in Austria, most notably demographic change, as the capital Vienna is expected to continue to grow in population, while other regions may experience a decline in population, which will affect the distribution of the workforce and market needs in different regions.
He also addressed the impact of technological advancements, particularly artificial intelligence, on the future of work, emphasizing that this technology will lead to radical changes in the structure of the labor market and may cause the loss of hundreds of thousands of jobs in the long term, while simultaneously creating new jobs whose nature is not yet fully understood. He stressed that the fundamental solution to confronting these transformations lies in investing in education and continuous training to ensure that workers can adapt to the new demands.
Despite these warnings, Johannes Kopf pointed to some positive indicators, especially after the implementation of reforms at the beginning of the year, where reducing the possibility of combining part-time work and assistance led to a limited decrease in the number of workers, compared to an increase in the number of people who returned to full-time jobs with insurance coverage, which he considered a success for this policy.
Thus, the AMS president’s statements reflect a combination of warnings about imminent risks related to international crises and alerts to profound future challenges related to demographic and technological shifts, at a time when the current situation requires flexible economic policy preparedness to face any unforeseen developments.