Life during Unemployment:

I worked at my junior developer job for one year and I am now unemployed for 2 weeks. Exactly I am unemployed since 27.01.2020 which is also the date when I have to visit the Jobcenter called AMS here in Austria. The law itself requires you to visit this agency when being jobless and not self employed. This is also the government agency which pays you unemployment when you have worked at least 1 year (or 6 months if you were unemployed once before). SInce I worked longer than 1 year from 07.01.2019 – 24.01.2020, meet this requirement.

When you visit the AMS the first time, you will be assigned to a employee there which does administrative tasks. This person will ask you about your qualifications, skills and work experience. In my case, I had to fill out a form about IT skills since my degree is about software development. The first observation was that this government agency is years behind current technology since Game, AR and VR were completely unknown to them. Game development related companies are so rare in Austria, that the government is not even aware of them. New technologies also do not exist.

After being questioned about your skills, you are sent to another employee which does financial tasks. This person will then check if you meet the requirements. This person will then give you another contract which you have to sign. The amount of money you get as unmployed person is 55% of your gross income. This money is net income and paid out for 6 months.

 

 

Fun fact about unemployment benefit:

If your taxes and social security fees are greater than 45% of you gross income, then your unemployment benefit would be greater than your net income! If you get rid of of your car, your net income could be even greater now. In this previous post, I calculated my real net income where the gross income was 2400€. The results after all work related expenses were 1520€ net. As unemployment, I get 1307€ net which is 213€ less. So this means that I get 213€ less of my net income for doing “almost” nothing!

It is still just “almost” since you have to do a little work. You have to apply to job positions and do whatever the agency wants from you. However the time requirement is not that high. The basicly want that you find a new rat race in order to keep the wheels turning. If you do not follow their orders, they will cut the unemployment benefits. You must show that you are willing to find a new job.

 

 

Completely broken system:

Lets do some little math: The amount of work required to meet the expectations of the government agency was about 10 hours/week. This will be about 40h/month time investment. In my previous post, I further calculated the hourly real net income which was about 7,11€/hour.

This time the calculation is much simpler since there are no travel distances and work related money losses. It is sufficient to simply calculate 1307/40 = 32.675€/hour. There are no unemployment related expenses, losses. Only time investment! According to the result, the net income of such hourly rate would be 32.675 x 38.5 * 4 =  5031.95€/Month which would be 3.3 times higher than the real net income inside the rat race.

The numbers clearly tell us how broken this system is. Something must be wrong when the difference between “doing what you want” and the rat race is about 213€ or even negative. These numbers show that there is no reward for going to work. Sometimes you could even get punished when going to work. Either we have to lower the taxes and social security fees or everyone will stop working soon. This system basicly rewards job rotation (work 6 months > 6 months unemployment > work 6 months and repeat…). There is no incentive to stay motivated in a company for longer than 6 months.

Since I am forced to look for a rat race, a rat race makes only sence with following conditions:

1. Decent salary greater than 3000€ gross better 3500€
2. Transportation time smaller than 30 minutes with bicycle.
3. Opportunity to learn highly valued skills (AI, Data Analysis, Financials, Cyber Security or Hacking)
4. Opportunity to get a job outside austria. (net income must be greater after relocating)

Another ugly option is to create a network of employers so you can work as employee based on current projects. This probably works best with smaller companies or StartUps. For example Company:

A > Unemployed > Company B > Unemployed > Company C > Unemployed > Company A…

If you are sympathic to the CEOs of those companies, then it could really be possible to build such ridiculous job rotation system.