Hungarian wages soar only on paper: we are not living better than last year

According to the CSO Labor Force Survey, employment in Hungary is developing quite well and the situation is gradually improving compared to the lowest point of the crisis. Of course, we are not even close to where before the crisis, but based on the figures, we can believe that the processes in the labor market are more favorable and that only a few tens of thousands of people work less in the primary labor market ( corporate and non-public sector, excluding foreign workers). than last year at that time.

However, according to another data release, CSO earnings statistics based on administrative data, the number of employees fell dramatically, from 3.2 million before the crisis to less than 3 million. (The discrepancy between the two statistics is briefly summarized in our table at the end of this article.)

The loss of 200,000 employees affects practically the entire private sector. Looking at the depth of the data, we have an even more unfavorable picture:

• in June of this year, 2.51 million people worked full time, 335 thousand less than a year earlier,
• 473 thousand worked at least 60 hours a month, but not full time, an increase of 142 thousand per year,
• while 102,000 worked less than 60 hours, an increase of 30,000.

Thus, in the coronavirus crisis, companies significantly reduced their workforce, cutting working hours. The latter is related to the Hungarian Kurzarbeit program, which has so far helped protect more than 200,000 jobs, yet the number of full-time employees has decreased by more than 10%, partly due to layoffs and in partly due to reductions in working hours.

The following graph shows how the number of full and part-time employees has changed this year:

In light of the above, it is no longer really surprising that the wage bill in the national economy has not grown as much as wages did. In recent months, CSO data has shown that earnings have risen by 9-10% amid the coronavirus crisis, but this is only true for full-time employees.

The wage bill in the national economy was more modest due to layoffs and reductions in working hours: Although the wage bill increased by around 8% at the beginning of the year, in April and May there was stagnation and a modest fall compared to the same period of the previous year. The increase in June was due to a one-time reward of HUF 500,000 for healthcare workers. All this shows that although

In fact, the median salary of full-time workers has risen substantially, between 9 and 10% gross, and for many, their income has not increased at all or their wages have decreased.

That is, it is people are not living better on average than last year, after hundreds of thousands lost their jobs and hundreds of thousands were forced to work part time following the effects of the coronavirus epidemic. Furthermore, due to inflation, the volume of total wages (wage bill) in the national economy has decreased by around 3% in real terms in recent months. Therefore, the 9-10% increase in earnings only applies to full-time workers, of which 335 thousand are less than a year earlier.

Labor Force Survey vs. Administrative data
A labor force survey An employed person is a person who has performed at least one hour of paid work in a given week or has had a job from which they were temporarily absent (due to illness, leave, etc.). The survey is based on surveys. the administrative income statistics on the other hand (which includes data from companies with at least 5 employees, the public sector and the non-profit sector) the employment criteria are stricter than this. Only those who work at least 60 hours a month are considered employed, those who work less than 60 hours are not included in the statistics. Therefore, there are a number of differences between the two data, ranging from data collection to criteria, as the Labor Force Survey already accepts 1 hour of “paid activity”, be it declared or undeclared work.

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