In its modern form, it dates back to the 1987 establishment of the Ministry of Labor and Social Affairs (Ministerium für Arbeit und Soziales).

It is responsible for welfare, senior citizens affairs, health care, and consumer policy; it is also charged with stimulating job creation and fighting unemployment.

Created in the final days of World War I, a time of widespread hunger and destitution, it was concerned almost exclusively with pensions and benefits for subjects widowed, crippled, or impoverished by the conflict.

In the decade leading up to the Anschluss and to World War II, implacable hostility between Social Democrats and Christian Conservatives had eroded civil society, undermined democratic institutions, and sparked a civil war; the Christian Social Party eventually manufactured a constitutional crisis that allowed it to replace the Republic of Austria with the Federal State of Austria, a Fascist single-party state.

In light of these experiences, Austrian politicians chose to reinvent the country as a consociationalist republic when Nazi Germany had collapsed and Austria, devastated and occupied by the victors, needed to be rebuilt.

[4] Social Democrats and Conservatism, while still intensely mistrustful of each other's motives and jealous of each other's influence, ruled the country through a series of constructive and mutually beneficial "grand coalition" cabinets.