Average salary 700 EUR in Hungary?

According to Hungarian Central Statistics Office (HCSO), the average gross monthly salary in Hungary exceeded 292,000 forints (EUR 933). This is 13.6 % more than it was in the previous year. However, according to hvg.hu, there are some problems with HCSO’s calculations. As we wrote before, Hungary still has the third lowest wages in the EU. Thus, many leave the country to work abroad for better wages causing crisis in the labour market.

Fostered work program omitted from average salary

To start with, wages have been boosted by a higher minimum wage as well as pay increases in certain segments of the public sector and at state-owned public service provider companies. Biggest salaries meaning an average gross 559,000 forints/month (EUR 1785) are paid by financial services and insurance companies. In contrast, employees in health care and social services are the most underpaid with an average gross 181,100 forints/month (EUR 578).

Hungarians in fostered work programs are in special position regarding labour market. On the one hand, they are omitted from salary surveys but as employees they are put into employment research. Their net average income barely exceeds

54,300 forints monthly (EUR 173).

Furthermore, their number was 169,000 in June. But there are other problems with HCSO’s calculations hvg.hu wrote about before.

How much does the “median” Hungarian take home?

The biggest problem with HCSO’s research is that average wage does not tell much about the salary of average employees. For example, if somebody receives 1 M and 9 others only 111 thousand, the average is 200 thousand. A solution could be to publish the median of the wages. Median is the salary from which half of the people get more and half of them less money.

However, HCSO does not publish median.

Thus, hvg.hu asked the institution about the problem. HCSO replied that they collect their data from companies, not individuals. Companies only tell how many employees they have and how much they receive all together. However, Central Bank tried to calculate the median of the salaries. According to a report published at the end of 2016, the median wage in Hungary fell behind the average by approximately 70 thousand forints. Thus,

median gross income might be approx. 222 thousand forints (EUR 708) now.

Smallest companies are not counted with

In addition, HCSO only takes into consideration companies employing at least 5 people. Thus, they exclude many companies saying that those firms do not have proper record on their employees. In contrast,

HCSO includes all companies employing more than 50 people in their surveys, which distorts the results radically.

To make matters worse, 37% of lone parents and 54% of people between jobs are living below the poverty threshold. In addition, Budapest increases wages a lot. For example, people living in villages get 80,000 forints/month (EUR 255) in average. Meanwhile, a resident living in the northern part of the Hungarian Great Plain gets 29,000 forints less than somebody with the same job in Budapest. Thus, though HSCO does not mention,

regional differences in wages are considerable in Hungary.

To conclude, Hungarian wages are increasing, but they are still third lowest in the EU. In addition, the increase is sensible only in particular sectors, and cities like Budapest. As a result, tens of thousands of Hungarians aim to go West for better salaries and working conditions. A complex solution might be Jobbik’s European citizen’s initiative wage union aiming to balance salaries between Western- and Eastern Europe before the latter becomes empty. However, government does not support the initiative. Even so Jobbik allied with other organizations in Central-Europe and has already started to collect the 1 million signatures needed to bring wage union to the table in the European Council.

Photo: Daily News Hungary

Source: hvg.hu, Daily News Hungary