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Minimum Gross Wage In Hungary To Exceed €350 Next Year

Tamás Székely 2015.12.23.

The Economy Ministry reached an agreement with three employer associations and two trade unions on the monthly minimum wages for skilled and unskilled workers, state secretary Péter Cseresznyés said. Under the agreement, the monthly minimum wage for unskilled workers next year will rise to gross 111,000 forints (EUR 353.6) and skilled workers will get 129,000 forints (EUR 411). The minimum wages will be confirmed in a government decree in the coming days.

Calculating with projected inflation of 1.6% and a personal income tax rate of 15% in 2016, the minimum wage will rise in real terms by 5.6% for unskilled workers and by 5.7% for skilled workers next year, the highest rates since 2002, the state secretary said. Unions confederation MaSzSz, also a member of the broad forum of representatives from the private sector and the government responsible for wage talks, did not sign the agreement. The state secretary said the parties also agreed to begin wage talks for 2017 next spring.

The opposition Socialist Party (MSZP) said in response to the deal that it is “astonishing” that the government refused to broker an agreement that would guarantee that the minimum wage reaches the subsistence level by 2018. With this decision the government “once and for all abandoned” the millions who, along with their families, do not make enough to get by, the party said. The Socialists said they were pleased to see that there is a union in Hungary that “truly represents the interests of workers” and was therefore unwilling to accept this year’s wage recommendation. The party said it had become clear that MaSzSz is the only union in Hungary today that represents workers. By making a one-sided decision on the minimum wage, the government had taken responsibility for the country’s “enormous working poverty and brutal emigration rate”, the party added.

Green opposition LMP said that with the agreement, the Hungarian government has refused to raise the minimum wage to the subsistence level, meaning that an eight-hour workday will still not be enough for many to get by in 2018. Party co-leader Bernadett Szél said it was unacceptable that the agreed minimum wage level is still below the subsistence level. She said that ever since the government taxed the minimum wage, Hungary has the highest tax rate for the lowest wage among OECD countries.

via hungarymatters.hu and MTI