Hungary: Latest working life developments – Q1 2018

An increase in the minimum wage, a wage rise for healthcare workers, and strikes in the public and private sector are the main topics of interest in this article. This country update reports on the latest developments in working life in Hungary in the first quarter of 2018.

Minimum wage increase brings negative effects for some

On 1 January 2018, the statutory minimum wage was increased by 8%, with a 12% increase for qualified, skilled workers. This was a result of the multiannual wage agreement signed in December 2016.

After last year’s wage increase, the repeated rise further squeezes Hungarian small and medium-sized enterprises. In particular, it has a negative impact on small rural settlements (those with a population of under 2,000). The wage hike was especially problematic in the retail sector, an area also hampered by labour shortages. The number of convenience stores has decreased in the smaller communities, leading to job losses of 7,000-8,000 at the beginning of 2018, whilst other stores (eg Coop) have reduced their opening hours in the smaller villages.

Another consequence is that employers are forced to continue using tactics to reduce the cost impact of the minimum wage increase, albeit to a lesser degree than in 2017. One of the tactics used is to reduce employees’ officially-documented working hours while their actual working hours remain unchanged.

Wage rise for healthcare workers has minimal impact

In January 2018, the Independent Trade Union of Healthcare (Független Egészségügyi Szakszervezet, FESZ) and the Hungarian Ambulance Workers' Federation (Magyarországi Mentődolgozók Szövetsége, MOMSZ) demanded higher wages from the government and the extension of the wage increase to all healthcare workers, threatening strike action if the government refused their demands. Thanks to this pressure, the government brought forward an 8% basic wage increase that was originally scheduled for November 2018. However, the increase was accompanied by the reduction of a special pay supplement received by skilled healthcare workers, meaning that the net wage of about 10% of these skilled workers remained almost the same. FESZ and MOMSZ responded by forming a strike committee and organising a demonstration on 24 March 2018, but only a few hundred people attended the event.

Low wages and shortage of skilled labour leads to strikes in public and private sector

The Trade Union of Hungarian Civil Servants and Public Employees (Magyar Köztisztviselők, Közalkalmazottak és Közszolgálati Dolgozók Szakszervezete, MKKSZ) led a two-day strike in January 2018 because of the low wages and skilled labour shortage. Some public sector employees have not seen a pay rise in the last ten years. Of the 990 local government offices in Hungary, 98 participated in the strike, and 6854 employees ceased work, which is 40% of all local government workers.

The government was not open to negotiations with MKKSZ, so MKKSZ organised another strike in February 2018. This time, 112 local government offices (7,312 employees) went on strike for five days. Finally, Tibor Pogácsás, Minister of State for Local Government at the Ministry of Interior, negotiated with MKKSZ on 28 March. However, the discussion did not lead to an agreement, so the organisation announced plans for a subsequent strike in April, after the national elections.

In the private sector at the beginning of 2018, the employees of Bosch in Hatvan and Miskolc went on strike, with both factories reaching a wage agreement in February.

Commentary

The rate of job vacancies is extremely high in the manufacturing, administrative and support service activities and human health and social activities sectors, and this increasing labour shortage is leading to more planned strikes. The Employers' Association of Multinationals (Multinacionális Cégek Dolgozóinak Szakszervezete, MCDSZ) at Villeroy & Boch Hungary Ltd, in Hódmezővásárhely, has announced a strike from 3 to 5 April 2018. 

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