Hungary’s economic growth is a “shared success” from which everybody including pensioners should benefit, Prime Minister Viktor Orbán said on Monday.
He said at the signing ceremony of next year’s minimum wage agreement that building a work-based economy was a top priority for his government. “If we have jobs, we have everything, that is the baseline,” he said.
Orbán said the government was continually working to cut taxes on labour, adding that those taxes had been reduced by 25 percent since 2010. He said that ensuring higher wages and maintaining the competitiveness at the same time required “consideration”, adding that his government had “realized that the representation of people must be in the focus of government, which will yield a common base for unions and employers to strike an agreement”.
Concerning the wage agreement, Orban said that the monthly minimum wage would be 200,000 forints (EUR 548) and the minimum wage for skilled labourers 260,000 forints. He added that the wages of people in public works schemes would also be “significantly” raised.
Between 2002 and 2010, during the previous governments, the real value of the minimum wage decreased by 2 percent, while in other countries of the region it increased by 30 percent, Orbán said. After 2010, the government made it a priority to “break with the practice of low minimum wages, to offer jobs rather than benefits, ensure that all those able to work should have jobs and that labour should be financially rewarding, not only morally”, he insisted.
In the past 12 years the minimum wage in Hungary has been increased by 172 percent, Orbán said, adding that it was “the greatest achievement of Hungary’s trade union movement”. (Between 2002 and 2008 the minimum wage was tax free, and from 2009 to 2011 almost tax free.) “That everybody can work is the greatest success of employers and the fact that public finance is also kept in order is the government’s success,” he said.
Orbán said that cutting employer taxes will “create further jobs and higher wages”, which would then further increase the economy’s performance. The “focal point” of a work-based economy is a “tax system which can improve competitiveness”, Orbán said, and argued that “tax cuts have made it possible to negotiate higher wages each year”.
The government has “offered an alliance to act together” with trade unions and employers, Orbán said, adding that raising minimum wages will also result in higher average wages, therefore Monday’s agreement “is not only good news to low earners but to everybody at work”.
László Palkovics, the innovation and technology minister, said that the Hungarian economy had performed well even during the coronavirus epidemic, adding that “the government’s measures are working” and the national economy is “again among the best performers” of Europe. He also noted that Hungary’s unemployment rate was among the lowest in the EU.
Imre Palkovics, the head of trade union federation MOSZ, welcomed the negotiations leading to the agreement as a “model predictable both for employees and employers”. He also added that currently 300,000 Hungarians earned minimum wages and 800,000 received the minimum for skilled labour.
Featured photo by Zoltán Fischer/PM’s Press Office