Huge differences can be seen in this year’s wage agreements in Hungary, but the increases surpass 10 percent in most workplaces, economic daily Világgazdaság reports, citing information from Hungary’s largest trade unions.
Companies are not in an easy position, and to avoid wage tension they have to raise the wages of those workers who earn above the minimum wage or even around the average wage, Imre Palkovics, president of the National Federation of Workers’ Councils (MOSZ), stated. This is because many workers have lost their previous wage advantage due to this year’s almost 20 percent increase in the minimum wage and the minimum wage for skilled laborers.
According to Tamás Székely, vice-president of the Hungarian Trade Union Confederation (MASZSZ), those earning in the lowest wage categories are likely to benefit the most from the situation this year, which means that there is also a risk of wages collapsing again.
Moreover, wage dynamics are also being driven by labor shortages. According to the latest data from Hungary’s Central Statistical Office (KSH), almost 4.7 million people had a job in Hungary in November, setting a new employment record, the paper outlined.
“The largest trade unions say the wage agreements include increases ranging from 8 to 17-18 percent.”
Palkovics says that with the increases, it is now a realistic expectation for the real wage growth to exceed 10 percent this year, up from around 4 percent last year.
In places we have been able to reach an agreement in recent weeks, employers have also realized that a double-digit wage increase is needed in any case, otherwise they will lose their workers, Tamás Székely says, warning that higher increases in the lower wage bands would again risk a decline in various wage levels.
Imre Palkovics also believes that in the salary category that was reached this year by the minimum wage for skilled laborers, a similar increase is not necessarily expected, despite the fact that companies have received tax cuts of more than HUF 500 billion at a national level.
For this reason, trade unions still have a lot of work to do, the president of the National Federation of Workers’ Councils said, adding that workers also need to put pressure on employers, especially since high inflation is eating away at a significant part of even these substantial wage increases.
Featured photo by Csaba Krizsán/MTI