Romania has educated us again, we do not rule this out

According to the portal, the EU methodology also contributed to this result, as Eurostat calculates this indicator in terms of employees, unlike, for example, the OECD, which measures labor efficiency per hour worked (and is still ahead Romanians).

However, EU statistics still point to a very serious structural problem for the Hungarian economy, the portal says.

The statistical office calculates how much GDP an employee produces and compares it with the EU average, expressed as a percentage. In Hungary, this indicator was 71.6 percent of the EU average in 2019, which means that last year only two Member States, Bulgaria and Latvia, had lower labor efficiency than ours.

Labor productivity is a very important indicator because it has a great impact on the competitiveness of the country in question. If productivity is low, most of the time it will have to be compensated with low wages, because if this is not the case, the same product or service can only be produced at a higher cost than elsewhere, which is a disadvantage competitive.

In Hungary, productivity has stagnated in recent years, lagging behind the region, while wages have risen sharply.

Is public work the goose?

By the way, there is a fairly popular explanation for the decline in domestic work productivity: the public works program, which attracted a very low-efficiency workforce to the labor market.

However, this is contradicted by the fact that when the intensity of public works decreased, productivity did not improve either.

The problem of Hungarian productivity is seen by many in Hungarian economic policy. And the problems are seen not only in SMEs but also in large companies, although the latter are still much more efficient than their smaller counterparts.

That is why economic policies based on supporting investments by multinational companies are increasingly criticized.