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Average wages in Hungary grew faster amid an unprecedented recession and coronavirus crisis than in 2017-2018, which was characterized by dynamic economic growth, burdened by severe labor shortages and bolstered by significant increases in the minimum salary. It is not surprising that only a few people felt this increase as the reason for the 15.6% increase in wages in the national economy was mainly the one-time HUF 500,000 benefit for healthcare workers. The CSO calculates as follows: the average gross earnings of full-time employees were HUF 421,700, excluding public employees HUF 434,000. Average net income reached HUF 280,500 without discounts and HUF 290,200 including discounts.
However, it is worth filtering the specific benefits from the data, for which the evolution of regular wages gives us an idea:
average gross ordinary income (without premium, bonus, special benefit for one month) can be estimated at 375,900 HUF, 10.6% more than the previous year.
That is, it seems that there has not been another wage explosion in the country, only the single reward for those who work in a sector (health) has lowered the average.
It’s worth looking at how earnings have evolved in the corporate sector. We can’t see a significant change here compared to the previous month, but the annual rate was slightly higher: in July, gross revenue was 10.8% higher for companies with at least 5 employees, reaching HUF 419,000. Net earnings amounted to HUF 279 thousand. It is important to note that in this case too, they are full-time employees, that is, the data does not show how the earnings of the hundreds of thousands of Hungarians whose previous working hours were reduced have evolved.
The graph for the public sector had to be rescaled due to rising healthcare wages as we have not seen such a significant increase in recent years. The one-time benefit of 500,000 resulted in an average 30% salary increase in the budget. The extent to which a single sector can deviate from the mean is a good example of this: health workers received 850,000 HUF, two and a half times more than a year ago. For their part, salaries increased by 14% in education, which can also be linked to the public sector, and by 8% in the mandatory and defense sectors.
The graph above shows the large fluctuations in income in the public sector, which are linked to the fact that certain sectors are rewarded on an ad-hoc basis, and that wage increases are surrounded by great uncertainty and unpredictability in some parts of the public sector.
Real wages in the private sector are steadily increasing between 7-8%, and although real wage growth in the national economy has exceeded 12%, the latter figure makes little sense this month as a single sector is causing the big increase.
In the next period, the increase in gross income will certainly return to the previous zone of around 8-10% for full-time employees. The wage bill in the national economy will certainly be much more modest, as a result of a sharp drop in employment and an increase in the number of part-time workers.
Cover image: Getty Images
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