Principal Economic Interest Groups

Principal Economic Interest Groups

The major participants in the Austrian economy are represented in national economic policy determination by a number of official and voluntary organizations. The most important of these are the chambers of commerce, agriculture, and labor. These are public corporations legally responsible for the representation of the interests of their constituent groups. Because of their legal and official status, membership in the chambers is compulsory for all enterprises, farmers, and wage and salary earners. There are also specialized chambers in various professional fields and in some provinces for agricultural workers, although these chambers are not as important in the operation of the economy.

The chambers function as semipublic bodies with broad responsibilities. For example, before the government can present any draft legislation to parliament, the bill must be sent for appraisal by the chambers. The chambers are organized so that they fully represent each of the appropriate professional and other groups involved in their particular sector of the economy. Because of Austria's relatively small size, the chambers constitute instruments for contact and exchange of information at every level of the economy. Therefore, they not only function as pressure groups from the outer reaches of the economy toward the center but also as communication belts that relay the decisions from the center to the regions.

Several other important voluntary organizations also play significant roles in economic policy decisions. These include the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund--ÖGB), an umbrella organization representing labor; the works councils that represents labor in enterprises; and the Federation of Austrian Industrialists (Vereinigung Österreichischer Industrieller--VÖI), representing management.

The Chambers of Commerce

Originally established under the Habsburg Empire in 1848, the modern chambers of commerce operate under legislation passed in 1946. They serve as the legal representatives of all persons engaged in crafts (small-scale production), industry, commerce, finance (banking, credit, and insurance), transportation, and tourism. Each of these six functional activities is handled by a separate section within the nine provincial chambers and in the parent body, the Federal Chamber of Trade and Commerce, commonly referred to as the Federal Economic Chamber (Bundeswirtschaftskammer). The most important functions of the chambers arise from their authority to interpret laws and regulations affecting the interests of their members and from their right to advise the Nationalrat (National Council) and review draft legislation.

The Chambers of Commerce

Originally established under the Habsburg Empire in 1848, the modern chambers of commerce operate under legislation passed in 1946. They serve as the legal representatives of all persons engaged in crafts (small-scale production), industry, commerce, finance (banking, credit, and insurance), transportation, and tourism. Each of these six functional activities is handled by a separate section within the nine provincial chambers and in the parent body, the Federal Chamber of Trade and Commerce, commonly referred to as the Federal Economic Chamber (Bundeswirtschaftskammer). The most important functions of the chambers arise from their authority to interpret laws and regulations affecting the interests of their members and from their right to advise the Nationalrat (National Council) and review draft legislation.

The Chambers of Agriculture

The chambers of agriculture are the principal bodies representing agricultural interests. There is no federal body comparable to the Federal Economic Chamber, but the Conference of Presidents of the Chambers of Agriculture is the de facto representative of the nine provincial chambers in all matters undertaken at the national level. The provincial chambers, in addition to their representational role, function at the local level to modernize and promote agricultural production.

The Chambers of Labor

The chambers of labor, which are public corporations, differ from the labor unions, which are private voluntary organizations, principally in their official character. They were legally established in 1920 to give labor what employers had had since 1848 in the chambers of commerce and thereby to provide labor with a representative voice in the preparation of legislation affecting employees' social, economic, vocational, and cultural interests. The principal governmental function of the chambers is to advise on draft legislation and administrative regulations directly or indirectly affecting labor. Thus, the fields in which they are concerned can include food supply, public health, tariffs and trade, use of leisure time, adult education, employer-employee relations, job safety, social insurance, and the labor market.

Labor, like agriculture, has no chamber at the federal level. The Vienna chamber, however, carries out most of the federallevel functions and maintains a general secretariat for the Chamber of Labor Conference (Arbeitskammertag). This body consists of a large staff of experts having advisory roles in economic policy, statistics, law, and consumer protection.

The Professions

The Regulation of the Professions (Gewerbeordnung) plays as important a role as do the chambers. The term Gewerbe, which can theoretically mean any kind of economic activity except large-scale production and services, is a concept that descended to modern Austria from the medieval system of crafts, guilds, and services. The term has no English equivalent but can best be described as the exercise of a particular profession or economic activity.

The Gewerbeordnung is a system that regulates the way a profession is exercised. The system, which regulates about 220 forms of economic activity, established certain standards: entry into a profession; operating regulations; methods for limiting price competition; rules governing permissible advertisement; exclusive franchises and licenses; shop-opening and price competition rules; market access controls; capital requirements; and local monopolies. In a variety of instances, the rules also provide for exemption from cartel law regulations (although the cartel law does not prohibit cartels but their abuse). Firms covered by these and similar regulations account for about 40 percent of total value added and investment in Austria and 45 percent of total employment. These firms are involved in such matters as professional services, wholesale and retail trade, insurance, banking, capital services, telecommunications, energy, and transportation.

The effect of the rules is to reduce competition in certain fields and to shelter those already admitted in these fields from excessive access as well as predatory practices by others, especially by larger firms. In a small country such as Austria, with many small villages and communities, the system serves largely to preserve the existing structure of economic activity and the position of local service providers who were established first in a community. It also protects consumers and others against fraudulent or unqualified service providers.

The chambers are the principal instruments that obtain protection or other forms of sheltered operation, largely because the chambers participate actively in the political process and are in the best position to make group or sector concerns felt at the national or provincial level. Some of these arrangements, such as sectoral support programs for transportation, mining, cement or paper, are still in effect, while others, such as those for textiles, clothing, leather, and paper, have been abolished.

The Austrian Trade Union Federation

Although union membership is not compulsory, about threefifths of employed persons belong to one of the fifteen major labor unions. These fifteen unions constitute the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund--ÖGB). The total membership was more than 1.6 million persons at the end of 1991.

The fifteen unions making up the federation represent four major groups: nine of the unions represent skilled and unskilled workers organized by industry, including farm and forestry workers; four of the unions represent public employees, including transport and communications workers; one of the unions serves the arts and professions; and the last union, the second largest in membership, represents private white-collar salaried employees. Because the latter is the only union not organized on industry lines, all wage earners in an enterprise ordinarily belong to the same union. The smallest union, the Union of Arts, Journalism, and Professions, had 16,310 registered members in 1989. In the same year, the largest union, the Union of Commercial, Clerical, and Technical Employees, had 340,348 registered members.

Works Councils

In addition to the trade unions, and theoretically separate from them, are the works councils, which exist at the plant level as the elected representatives of all plant employees, whether or not they are union members. According to law, the works councils look after the economic, social, health, and cultural interests of employees. This, in practice, means involvement in matters of discipline, safety, sanitation, dismissal, and transfer, as well as the handling of grievances and the implementation of collective bargaining agreements. Works councils in corporations also have a voice in management, electing two members to the corporate board of directors with all the rights and duties of other directors.

Although these various bodies representing labor are theoretically separate, they work closely together, not only because of overlapping interests and responsibilities but also because labor leaders tend to be functionaries of both the unions and the chambers. At higher levels, they are frequently members of parliament as well. At lower levels, the elected members of the works councils in the plants are almost invariably union members and are usually union officials as well.

Despite an apparent superfluity of bodies representing the interests of labor, the division of primary responsibilities between them is fairly clear. The chambers represent a worker's interest on the economic policy level, the works councils are concerned with a worker's everyday interest at the plant level, and the unions serve primarily as collective bargaining agents. In this function, a specific union usually conducts the actual negotiations, and the ÖGB has the ultimate power of approval and reserves for itself the negotiating authority for agreements that pertain to all employed persons.

The Federation of Austrian Industrialists

The principal private-sector organization is the Federation of Austrian Industrialists (Vereinigung Österreichischer Industrieller--VÖI), founded in 1941. In the late 1980s, its membership consisted of about 2,400 firms employing about 420,000 persons. Although the VÖI does not have the legal status of the Federal Economic Chamber, it occupies one of that chamber's two seats on the Social and Economic Affairs Committee of the Parity Commission for Prices and Wages (commonly known as the Parity Commission). Because the VÖI represents the interests of most large-scale private-sector industry, it essentially controls the industry sector of the Federal Economic Chamber. It also deals directly on behalf of its members with the appropriate ministries and committees of the Nationalrat. Like the chambers, the VÖI submits recommendations on proposed legislation. It is also active in handling relations between domestic industries and foreign industrial associations.

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