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The employee side also wanted to achieve a double-digit 10% increase in the minimum wage this year. Meanwhile, late last fall, employers didn’t want to hear about the mandatory minimum wage increase by not one forint. Both sides can be understood. The workers have had a difficult year as many have lost their jobs while others have worked reduced hours. Despite a significant increase in net earnings (among full-time employees) of 9-10% last year, the increase in the wage bill in the economy barely exceeded inflation. In other words, workers rightly feel that in 2020 only wage statistics were beautiful, but their lives didn’t get easier, their living standards didn’t really improve.
Meanwhile, corporate revenue fell sharply last year due to the crisis, and there were those who had to suspend operations (and there were those who were unable to resume even now). After the uncertainty of this year, the coronavirus is still with us, demand is still quite weak, so it is not surprising that companies did not really want to increase the minimum wage from January. After last year’s deep recession, unprecedented since the 2008-2009 global economic crisis, and so far this year, experts can imagine anything from a 1% expansion to 6% GDP growth. % this year, so it’s no surprise that the January pay increase issue is also uncertain for many companies.
The employer and the employee could not even agree on the issue of the minimum wage and the guaranteed minimum wage. Employers wanted a 3% increase in the minimum wage, while the employee side would have seen a realistic increase of 5-6.5% in the latest wage bargain last year. For now, we still don’t know how much the minimum wage will increase in January and a deal isn’t expected until sometime in the first month of the year. If there is no agreement, the government can decide about it.
In the last four to five years, the bargaining position of workers has been favorable due to labor shortages, but now they can hardly force a significant wage increase (except in shortage occupations). Due to the prolonged effects of the crisis, most workers who fear their job will undoubtedly accept the lower pay increase offered by their employer than in previous years, and the complaints will not change on their heads, even if many companies leave their jobs. wages unchanged.
Due to the uncertain economic situation, taking all this into account, private sector revenues are expected to grow on average 4-5% this year. After inflation could even exceed 3% in 2021, real wages could only increase by 1-2%. But it’s also possible that the purchasing power of earnings won’t increase at all this year. This will break the rapid pace of wage growth that has lasted for many years.
In the public sector, as we have become accustomed in recent years, the situation will not be uniform this year either. Based on the information so far, we can know that whenever, for example, in the case of doctors, a very strong increase in salaries can occur, while the salaries of teachers are not expected to increase significantly this year either. . In other words, we will see big differences between some public sector employees, so the average increase in public sector income will paint a distorted picture of the processes.
Cover image: Getty Images
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