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Wage Growth at 10.1 % in April

MTI-Hungary Today 2021.06.30.

Wage growth in Hungary increased by an annual 10.1 percent in April, picking up from 8.7 percent in the previous month, the Central Statistical Office (KSH) said on Wednesday.

Data for businesses and institutions with at least five people on payroll show the average gross monthly wage for full-time employees stood at 440,600 forints (EUR 1,250). The average net wage was 293,000 forints (EUR 833).

The average gross median wage was 347,000 forints (EUR 987).

Calculated with twelve-month CPI of 5.1 percent in April, real wage growth stood at 4.8 percent.

Excluding the 85,700, Hungarians working full time in fostered work programmes — who earned on average gross 85,000 forints in April — the average gross monthly wage in Hungary was 451,800 forints.

The average gross wage in the business sector, which includes state-owned companies, rose by 8.9 percent to 457,700 forints, excluding fostered workers. The average gross wage in the public sector, excluding fostered workers, increased by 13.3 percent to 446,500 forints.

People working in finance and insurance were the highest earners in April, getting a gross monthly 908,000 forints on average. People working in commercial accommodations and catering earned the least: 256,000 forints on average.

A broader set of data covering all full-time employees, not only the ones at employers with a payroll of five or more, show the average gross wage stood at 427,600 forints and the average net wage at 284,400 forints in April. The median gross wage was 332,000 forints.

Excluding fostered workers, full-timers earned a gross monthly 437,800 forints and net 291,100 forints.

Data for January-April show men earned, on average, 19.7 percent more than women during the period.

Gov’t: wages have been growing for 100 consecutive months

Commenting on the data, a government official noted wages were growing even during the “most difficult pandemic period”. Sándor Bodó, a state secretary of the innovation and technology ministry, told news channel M1 that wages have been growing for 100 consecutive months now.

“We can see that the economy … has survived this very difficult period, albeit with difficulties, thanks to hard work and targeted measures,” Bodó said.

In the commercial sector, wages grew by 8.7 percent, while the growth came to 12.8 percent in the public sphere, in part thanks to government measures, Bodó said. Health-care workers received a 35 percent raise, he added.

Analysts: employers forced to raise wages to draw and retain workers

András Horváth, the lead analyst of Takarékbank, noted that wages continued to rise despite the pandemic and a lower minimum wage hike. Employers are forced to raise wages to draw and retain workers, he said.

Minimum wages, the backbone of last year’s general rise, increased at a slower pace this year, Horváth noted. The effects of that step are yet to manifest in wages, and might be offset by government plans to raise the minimum wage to 200,000 forints as early as next year, he said.

Annual wage growth is expected to be around 9 percent this year, Horváth said, with real wage growth around 4.5 percent. Next year might see a 8.5 percent rise, he said.

Gábor Regős of the pro-government Századvég Institute noted that wages grew faster in the public sector, driven by targeted raises to sectors such as health care. Other sectors are yet to see a wage hike, he said.

Growing wages in the hospitality sector point to a difficulty to replace employees laid off at the beginning of the pandemic, and to the sector’s players restoring full wages reduced during the crisis, Regős said.

Featured photo illustration by Attila Balázs/MTI