EurWORK European Observatory of Working Life

Hungary: Working conditions of young entrants to the labour market

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  • Observatory: EurWORK
  • Topic:
  • Job quality,
  • Published on: 18 December 2013



About
Country:
Hungary
Author:
Zsuzsa Rindt, Ildikó Krén
Institution:

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

Youth in Hungary enfaces a particular situation during the times of the world-wide economic crisis. Significant demographic changes in the Hungarian population is to be observed, new life patterns are being followed; the structure of the labour market is continuously changing; the school system is just being restructured; a new, liberalised labour code has just been introduced. Thus employability and an increase in the employment figures of the youth are priorities; however, working conditions are not drawing attention yet. Working conditions in general are not in the focus of observatories anyway, especially not in these days, when workers fear of losing their jobs in case they even have one. Also statistics are hardly available, and data concerning entrants are rarely distinguished from overall employment statistics.

Introduction

This EWCO CAR is specifically focused on the group of “young entrants to the labour market”. This group includes all young people (between 15 and 30 years old) who have recently entered into the labour market (i.e., people with a work experience shorter than 1-2 years in the labour market), with relative independence of their age and for whom work is their main and core activity. This definition excludes young people for whom studies are their main activity but who combine their studies with some remunerated activity as part of their training programmes (e.g. apprenticeships in dual systems), as well as unemployed young people, even if they are actively looking for a job (see Background note for more detailed information on the concept of young entrants to be considered in the research).

The CAR coordinating team is conscious that such as “narrow” definition of “young entrants to the labour market” can make difficult the identification and collection of relevant information on the topic. Therefore, and in the case no national information is available using this “narrow” definition, National Correspondents can use a “proxy” definition of “young entrant to the labour market” as any young person (i.e. between 15 and 30 years old) who is in employment, irrespectively of the number of years of experience that he/she has in the labour market (again, unemployed young people are excluded from the analysis).

The questionnaire focuses on the following topics:

  • General description and characterisation of the main current working conditions of young entrants to the labour market in your country in comparison to other age groups (around 700 words)

  • Identification and characterisation of existing differences in working conditions within the group of young entrants to the labour market in your country (around 600 words)

  • Evolution of working conditions of young entrants to the labour market in the last five years. Effects of the economic crisis (around 500 words)

  • Initiatives taken by national governments/social partners in order to improve employment levels and working conditions of young entrants to the labour market (around 500 words)

  • Final commentary on the main results (around 100 words)

Block 1: General description and characterisation of the main current working conditions of young entrants to the labour market in your country in comparison to other age groups

NCs are kindly requested to provide the most updated information (coming from national surveys, administrative registers or ad-hoc national research/studies) on a number of working conditions-related variables specifically related to young entrants to the labour market in comparison to other age groups. Please provide the information only for those variables where significant/important differences, either positive or negative, can be identified in relation to other age groups, stressing the causes and rationale of these differences

Suggested extension of this section: around 700 words

In 2010, there were 1,880,000 people within the age group 15-29 in Hungary, which represented 27.8% of the economically active population within the age group 15-64. This generation counted in 2010 5 percentage point (370,000 persons) less in this cohort than in 1998 (when there was a boom in population). That occurred, on the one hand, due to aging population (an inverted age pyramid) in Hungary. On the other hand, it is a consequence of the expansion of the education system over time, where youth are at school for a longer period of life, so increasing inactivity rates mainly in the cohorts of the age 15-19, 20-24 are visible. From 1998 to 2010 the activity rates in these cohorts have changed respectively from 15% to 3.7% (age group 15-19); from 60.6% to 44.8% (age group 20-24) and a slight increase can be observed in the age group of 25-29 from 72.8% to 77.2% within this period of time.

In Hungary the employment rate, especially among youth, is very low. In fact, it is one of the lowest in Europe. This rate has decreased since 1998 parallel to their economic activity rate. The intensity of the decrease has slowed down somewhat at the time of the EU accession (2003-2006) but the economic crisis has increased the tendencies again.

The activity of young people has dropped significantly during the last ten years:

Economically active population, 15-29 years old
 

active

inactive

total

1998

1127000

1122000

2250000

2010

826000

1054000

1880000

2012

817000

1004000

1822000

Source: KSH, http://www.ksh.hu/mpiacal9807_tablak

The unemployment figures demonstrate the vulnerability of the age group 15-24 especially:

Unemployment (%)
 

1998

2010

2012

15-64

7.8

11.2

11

25-29

8.4

14.3

14

20-24

11.4

25.1

26.4

15-19

26.5

45.7

51.9

Source: KSH, http://www.ksh.hu/docs/hun/xstadat/xstadat_hosszu/mpal9807_03_10a.html

There is no information about the working conditions of young entrants available.

1.1 Career and employment security issues

The Hungarian labour market is highly segregated, showing significant differences along the educational levels, which leads to an instable employment structure. Labour market opportunities are more likely open for those having higher educational degrees and recent changes in the education system also allow more people to get those degrees. On the one hand this secures the basis towards the “knowledge-based society”; on the other hand it creates oversupply of higher educated employees, reduces the prestige of vocational education and generates shortage of well qualified specific professions requiring vocational education instead of high-school and university degrees, mainly in processing, manufacturing, and agriculture.

Ratio of atypical work contracts, 15-74
 

2004

2011

 

nr

%

   
temporary contracts

228900

6.8

299700

8.9

part time employment

105000

2.7

161000

4.2

agency work contracts

20100

0.6

33700

1

public worker contract    

253000 - 2011

261782 - 2012

 

Source: KSH

The gaining national ratio of atypical employment forms lead to insecurity, and decrease commitment, especially for the entrants without longer working experience.

According to GFK (2011), youth’s loyalty is far behind the elder generations’ loyalty towards the employers. This creates conflicts between the younger and older generation, makes career opportunities for younger people less available. In Hungary young people imagine to fulfil a career by changing employer or leaving the country but not at the current work place.

According to the online polls of IPSOS (F&F, Ipsos, 2011), half of the young workers (between 15-25 years, 30% of this cohort is working) fear of losing their jobs, but they are not really familiar with the current labour market movements. Women with new-borns do not have illusions on their career opportunities, 71% thought they would have problems when returning to the work place.

1.2 Skills development

There is no specific information about entrants’ skill development available. It is fully depending on the companies’ internal policy. Companies normally offer the new hire trainings to make entrants acquire the necessary skills, and then the deepening of their knowledge is likely to depend on the workers’ enthusiasm. International companies invest more in training and skill development. A good example is Audi Academy, offering staff development, technical, language and even marketing trainings, but it is not only for their (young) entrants, these trainings are available for external clients too, as payable training services.

1.3 Health and well being

There is no information about entrants’ health and well-being available.

1.4 Reconciliation of working and non-working life

There is no information about entrants how they reconcile working and non-working life available.

Anyway, Zsolt Fehér, an expert of the Assessment Systems International (Privátbankár, 2012) said that today’s youth is not interested in empowerment, enrichment of tasks, or classic team buildings in the workplaces. Youth plan career paths differently nowadays, where the balance of working and non-working life is not an aim but a prerequisite.

Block 2: Identification and characterisation of existing differences in working conditions within the group of young entrants to the labour market in your country

NCs are kindly requested to provide the most updated information (coming from national surveys, administrative registers or ad-hoc national researches/studies) on differences of working conditions within the group of young entrants to the labour market, for a series of variables. Please provide the information only for those variables where significant/important differences, either positive or negative, can be identified, stressing the causes and rationale of these differences

Suggested extension of this section: around 600 words

2.1 Personal characteristics of young entrants

Changes in economic activity, by age groups
 

15-19

20-24

25-29

1998

15%

60.6%

72.8%

2010

3.7%

44.8%

77.2%

2012

3.7%

45.5%

78.3%

Source: Hungarian Central Statistical Office: http://www.ksh.hu/docs/hun/xstadat/xstadat_eves/i_qlf018.html

There is no information about entrants’ working conditions available.

Youth are more likely to be exposed to precarious working conditions, than their elder colleagues. It correlates with the assumption that the younger entrants living in the country side with disadvantageous social economic background; have likely less education, professional skills, or are less aware of their rights and responsibilities. (Diplomás Pályakövető Rendszer, 2012)

There is a general discriminative attitude and a negative pay gap towards women at the Hungarian labour market; it does not specially concerns young women discrimination. However, – without having detailed information on it, it is highly likely that young female workers have additional disadvantages and suffer from sexual (direct and indirect) harassment by the mainly male bosses (Nők és férfiak béregyenlőtlensége Magyarországon, Borbély, 2011; A férfiak és nők közötti jövedelemegyenlőtlenség és a nemi szegregáció a mai Magyarországon, Sík-Csaba-Hann, 2011).

Without regard to the age perspective – there are no information separately; in international comparison harassment and violence at work is a little below the world-wide average. According to an online poll of IPSOS (Ipsos, 2010) in 22 countries, on average 7% of workers have been physically assaulted out of anger by a co-worker or manager during a workday. This rate was 5% in Hungary. The research emphasize that younger people (below the age of 35 years) are more likely assaulted (internationally 8%), elder workers (between 50-64 years) were in 4% exposed to harassment or violence at work. The same research found that internationally 8% of the workers (7% in Hungary) was sexually harassed in their workplace where senior people have tried to have sex with them just because they work for them, not for true relationship. This was more significant among women (10%) than men (7%), and for younger workers (11%).

The crisis affected more the low educated young people, as higher educated young people get job in positions, where lower level would normally be required.

As lower qualified people are more often working under precarious conditions there is probably a negative effect also on their working conditions. So a correlation is highly likely.

Correlation between graduation and job opportunities
 

2000

2010

2011

Graduated

14.8%

25.7%

28.1%

Early leavers

13.9%

10.5%

11.2%

Source: Hungarian Central Statistical Office: www.ksh.hu

The compulsory educational age has just dropped now from 18 to 16 (where the pension age limit is extended from 62 to 65).

The government aims to rationalise the school system and reduce costs: „expand the active age group” and employment figures.

Critics and the ombudsman say that this measure means that the government apparently doesn’t want to take responsibility for those who leave school early. The local labour offices are not ready for the expanding demand of advisory services. This applies for those who:

  • don’t even finish secondary education, just drop out at the age of 16 from the school system,

  • for the ones who finish secondary education but can’t get into the tertiary education – due to the quota system – strengthened in 2011/2012,

  • for those who can’t afford the vocational education due to its restructuring in 2011/2012.

An important skill to find a job and complete a career in Hungary is the knowledge and use of foreign languages, at least English is a must.

The main personal concerns of this generation were the unemployment and the lack of future prospect, but rarely the working conditions. Many young people have got a wrong pattern from older generations in the families, for example from unemployed parents over generations. There is no practical education at schools to help youth to the labour market – visits, practice days, open days at companies. The current situation in Hungary does not seem to be really motivating.

2.2 Occupational characteristics

According to Profession.hu analyses in 2012, the Hungarian labour market is lacking of engineers, IT specialists, call centre operators and sales personal. However, in these positions trainees are most likely welcome, with a lower level of salary expectations.

Entrants can expect a lower level of salary, than the national averages, but not less than the national minimum wage or the guaranteed minimum wage (see annual update on pay, HU1303021Q). It has to be emphasised that the level of wages are significantly depending on the sector, and the time spent at the workplace (Felvi.hu, 2008, 2010). Recently graduated entrants’ monthly average income can differ up to HUF 90000 (EUR 300) from the disadvantaged sectors (pedagogues’ average net wage HUF110-130000/ EUR390-400) to the most favourable ones (IT, technical professionals’ average net wage HUF200-219000/ EUR690-700). The ones graduated in 2008 could earn around HUF 20000 (EUR65) more, than the ones graduated in 2010, as having two years more work experience.

For example there are a lot of young workers in the security and in the commerce sectors, which are well known for precarious work which does not require high qualification.

In Shared Service Centres, accepting to monotony, young entrants can work in better conditions and salaries than the average. Speaking English a call centre operator can earn net HUF168000 (EUR555), in case the entrant speaks a special language (Swedish, Russian,…), the net amount can reach HUF 209000 (EUR700). In the SSC a faster career is also possible, within 5 years a junior can become group leader with double salary (Privátbankár, 2012).

Block 3: Evolution of working conditions of young entrants to the labour market in the last five years. Effects of the economic crisis

NCs are kindly requested to provide information on the following items: NCs are kindly requested to provide information (coming from national surveys, administrative registers or ad-hoc national researches/studies) on differences of working conditions amongst the group of young entrants to the labour market in comparison to the situation five years ago. Please provide the information only for those variables where significant/important differences, either positive or negative, can be identified, stressing the causes and rationale of these differences

Suggested extension of this section: around 500 words

3.1 Please provide information on the evolution of working conditions of young labour entrants in the last five years. Have working conditions of this group improved/deteriorated in comparison to the existing situation five years ago (before the economic crisis began)? What are the reasons for these changes

According to our researches there had not been any relevant researches on labour conditions for young workers so there is no possibility to assess the last five years’ development.

3.2 Based on possible existing prospective studies, please provide information on the expected evolution of employment levels and working conditions of young labour market entrants in your country in the near future (coming 2-3 years)

This question cannot be answered as there are too many changes in the Hungarian economics, politics, educational system, labour relations at the moment.

Block 4: Initiatives taken by national governments/social partners in order to improve employment levels and working conditions of young entrants to the labour market

4.1 Identify main recent national measures/initiatives (1-2) put in place in your country by public authorities in order to improve employment opportunities and working conditions for young entrants to the labour market.

Example 1: General information

„First Job Guarantee” („Első munkahely garancia program”) by the Ministry of National Economy launched in September 2012.

(Source: A good start is half way to success, Ministry for National Economy, Budapest, 2012)

Objectives pursued

To facilitate youth to get work experience of at least 4 months.

Support offered, activities carried out

Employers hiring registered job seeking career starters in part time or full-time employment would be entitled to a subsidy for maximum 4 months, the amount of which is 100% of the total labour cost up to twice the minimum wage (HUF186000, EUR 615), plus the refund of travel expenses.

Target group(s)

Employers regardless of sector or form of business

Youth (younger than 25 years, with higher education graduates, under age 30) who are registered with the National Employment Service; meet the conditions for entry into employment; and did not obtain eligibility for job seekers’ allowance after completing their studies. Among career starters, priority is given to unskilled persons and long-term jobseekers.

Outcomes

According to the data of the Ministry until the mid of November 2012 the programme supported the employment of 7142 employees.

The most popular was the programme in the disadvantageous counties, such as Békés with 983, Szabolcs – Szatmár – Bereg with 960 and Borsod –Abaúj – Zemplén with 866 involved young entrants.

It should be also mentioned that even the programme ended on 31 December 2012 – last payments happen in 2013– so there are people still working with this contract.

Assessment

There is no information about the long-term impacts of the measure, the Ministry states that according to the first polls, the companies are highly likely employing these entrants on a longer term.

Example 2: General information

“Housing allowance” (“lakhatási támogatás”) introduced by the government nation-wide in 2012.

(Source: A good start is half way to success, Ministry for National Economy, Budapest, 2012)

Objectives pursued

To facilitate people’s mobility in Hungary.

Support offered, activities carried out

Eligibility criteria:

  • At least six-month long twenty-hour-per-week employment found at least one hundred kilometres

  • or three hours’ (six hours daily in total) travel by public transport from the person’s domicile;

  • Monthly gross earnings may not exceed 300% of the amount of the minimum wage.

  • The allowance must be applied for prior to entry into employment. In every case, the decision is made by the local job centre competent according to the place of domicile.

  • The housing allowance is payable for 18 months as a fixed amount calculated degressively every six months: for the first six months HUF 100 thousand (EUR 337), for the second six months HUF 60 thousand (EUR 202), and for the third six months HUF 40 thousand (EUR 135) (i.e. HUF 1.2m/person in total) may be awarded, which amount can be spent on rent and overheads proven by invoices. If the family moves together and several members are entitled to the allowance, the amount will be higher. If two persons are entitled to the allowance in the family, its amount will be HUF 150 thousand (EUR 505), HUF 90 thousand (EUR 303) and HUF 60 thousand (EUR 202), respectively. If there are three or more persons having entitlement to support, the amount of the allowance will increase to HUF 200 thousand (EUR 674), HUF 120 thousand (EUR 404) and HUF 80 thousand (EUR 270) for the respective periods. After the 18-month-period has expired; the allowance can only be applied for again after 36 months. However, if the recipient loses their job but re-enters employment within 30 days, they will continue to receive the allowance already awarded.

Target group(s)

Jobseekers (for at least three months), young entrants without working experience, and employees affected by collective dismissals who, in absence of suitable jobs, are not able to enter employment locally.

Outcomes

According to the data of the NFSZ during the first 7 weeks of the programme, 5826 people have asked for further information about it and 300 applications have been registered.

This measure is financed within EU-funded active labour market programmes under the New

Széchenyi Plan. Over HUF 2 billion has been ring-fenced for this purpose allowing engaging about 1 800 persons.

Assessment

It has to be emphasized that the government only targets employment figures, not the terms, conditions, or quality of jobs. Some steps taken by the government show into a mobile, flexible, trainable, career-oriented workforce, others are introducing measures to tackle family and working life balance.

Decisions are taken in general concerning the employment situation; shall it be about education, unemployment, financial problems. Specification in measures and subventions targeting different groups has not have a long history in Hungary. Newly the issue of the „youth” appears more and more highlighted in discourses.

4.2 Identify main recent initiatives (1-2) put in place in your country by social partners (either at national, sector or company level) in order to improve working conditions amongst young entrants to the labour market.

Today’s unionism in Hungary is losing weight, rights and financial resources as a result of the current governmental measures. Even if there is no autonomous youth policy in the social partners’ agenda, at the former tripartite body, the National Interest Reconciliation Council (Országos Érdekegyeztető Tanács, OÉT), the trade unions represented youth’s rights too.

However, trade unions are organising youth committees and events and some trainings, as the youth can’t get strong enough to fight alone with their problems:

  • - appearance in youth-orientated press, with the purpose of recruiting new members, and raising the public attention for the employment problems of youth.

  • - specific campaigns (for instance: night events on the 1 of May, concert against undeclared work); a „ youth=modernity?” conference (Liga Youth section, 2012)

  • -“flash mob” actions against undeclared and unfair employment;

  • - operating online forums;

  • - appearance at schools: spreading information about of work related issues and trade unions;

  • - establishing and maintaining connection with students’ organisation.

Anyway, there are no special programmes for improvement of working conditions. The youth organisations are more concentrating on getting (decent) work at all. Therefore single activities cannot be mentioned here.

Commentary by the NC

It is difficult to assess youth employment conditions without having overall studies and researches. Ignoring working conditions in general, especially those of the youth will result in long-term problems, as people are more likely to take into consideration and balance their family and working life. However, the structural changes and states’ responsibilities in education, labour market and in the legislation can run out as well as bad. In short term, employment figures are expected to rise any way, and apparently that is the main goal of the current politics and policy makers.

Zsuzsa Rindt, Solution4.org

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