This is 1/3rd of the population of the country. These people represent the lower-income group of the society whose rate increased by 4.7 pc in only 10 years.
According to mfor.hu, the Hungarian government – like other Western, right-wing parties – regards the strengthening of the middle class as its top priority because they are the basis of the economy with their workforce, small and medium enterprises. Thus, the government talks about the necessity of a healthy and wide middle class; however, the cabinet’s measures help upper-middle-class people more than lower-middle class ones. For example, the Orbán-administration changed the progressive Hungarian tax system to a flat tax one.
Even though theoretically every working people benefited from the modification it can be stated that in practice,
lower income groups lost money.
This is because even though their tax was cut by 1 pc, the government abolished tax credit, as well, therefore, their final balance is negative. In contrast, in the pockets of higher income groups remained more money because their tax was halved.
Mfor.hu states that besides strengthening middle class the government should direct more money on supporting the catching-up of the lower income groups and provide them a chance to become part of the middle class. However, based on the statistics, their financial state is worsening and new research sheds light on the process of their pauperization.
OECD has recently published a study in which they state that between the mid-2000s and the mid-2010s,
only the rate of the lower social class increased in Hungary.
- 30 pc of the society is in the group of low-income people and their rate increased by 4.7 pc in the last 10 years;
- 62 pc is in the middle class and their rate decreased by 3.7 pc;
- 7 pc is in the upper ten which is the result of a 0.9 pc fall.
According to the definition of OECD, the low-income group’s wage does not reach 75 pc of the median salary; the middle-class is between 75 and 200 pc of the median while the upper-middle-class gets more than 200 pc of it.
If we make a regional comparison, in the Czech Republic, the rate of people belonging to the low-income group decreased by 0.9 pc to 23 pc while the middle class’s share increased by 1.9 pc. The upper ten also reduced by 0.9 pc to 6 pc. In Slovakia, a similar process happened though not only the rate of citizens being part of the middle class increased but also the upper-middle-class broadened. In fact, 24 pc of the Slovaks belong to the low-income group.
Polish society resembles most to the Hungarian:
the rate of the low-income group is 29 pc, the middle-class’s share is 61 pc while 9 pc of the people belong to the upper-middle-class. In Hungary, those having a salary of less than 400 EUR per month belong to the low-income group of society which means 3 million people (30 pc) in the country. People being part of the middle class have an income between 400 and 1035 EUR. The median average income in Hungary – according to OECD – is 530 EUR.