The Central Statistical Office (KSH) published the data of monthly median wages in Hungary for the past two years. The median wage has been a shortfall in statistics for a very long time, however, the statistical office released a more detailed series of data connected to the indicator. What can be concluded from this is that half of all employees receive no more than three-quarters of the official average wage, and the data sheds light to a new picture regarding the wage situation in Hungary, Népszava writes.
The KSH has published earnings statistics that have been demanded for years in its tables related to its January quick report. These, in turn, support the long-standing criticism that official average wage data reported from month to month has so far painted a romanticized picture of domestic earnings.
Employees of smaller companies, which have been ignored so far, but are now finally taken into account, actually earn less than the employees of larger companies. Therefore, they pull down the average by more than 10,000 forints (EUR 28). In fact, half of all employees earn only a maximum of three-quarters of the official average salary, which is now over 400,000 forints (EUR 1100), meaning that in reality people take home tens of thousands of forints less than what is officially reported.
The median for the total working class is an important indicator because the data on average earnings published per month does not reflect the full reality, as it does not include part-time employees or employees of companies with less than 5 employees. Moreover, this average can be significantly higher, since the top 1 per cent, who earn a lot more than those in the middle, can push the values of the average higher.
According to some experts, the median indicator shows the income conditions of society much better. In statistics median is the value separating the higher half from the lower half of a data sample, or, for the sake of this example, earnings. In other words, the median is the amount by which half of the workers earn more and half earn less, and it is commonly referred to as “the middle value.” While the average takes outliers into account, median does not, and hence gives a clearer picture of what value is in the middle.
We can get a more detailed picture of salary developments in Hungary, from the monthly data that has now become public. According to the table, the average earnings of full-time employees (excluding public employees) grossed 407 thousand forints (EUR 1130) in January this year, while the median salary grossed 325 thousand forints (EUR 900). This means that the gross salary of half of the full-time employees is actually at least 82,000 forints (EUR 230) less than the official average salary.
Comparison of Average and Median Salaries from 2019-2021 in Hungary. Source: Central Statistical Office
Ultimately, the relationship between median and average salary is vital since it can indicate income inequality in a country. For instance, an average salary that is much higher than the median salary demonstrates that there are probably a few employees earning significantly more than the overall group.
Featured photo illustration by Sándor Ujvári/MTI