Earlier minimum wage rise agreement likely to remain in force

In spite of efforts by unions to renegotiate an earlier agreement on the scale of minimum wage rises for next year because of higher than expected economic growth, a last-minute deal seems unlikely, daily Magyar Nemzet said on Thursday.

The VKF, a forum of employers, unions and the government, agreed a year earlier to raise the minimum wage for skilled and unskilled workers by 8 percent in both 2019 and 2020. The wage rise was part of an earlier agreement reached between the sides pairing wage growth with payroll tax cuts.

However, unions argue that the deal should be revisited because GDP growth has beaten expectations and minimum wage growth is now under overall wage growth.

“Minimum wage growth has remained well behind the increase of gross wage growth in the private sector of around 12 percent. Additionally, the main economic indicators are better than expected, which is why trade unions believe an increase under the double-digit convergence rate is unacceptable,” Imre Palkovics, who heads workers councils association MOSZ, told the paper.

László Perlusz, the chief secretary of employers association VOSZ, told the paper the projected downturn in the global economy is sure to cause Hungary’s GDP growth to slow next year.

He added that the competition for skilled labour is still strong, and while bigger companies that enjoy a competitive advantage may be able to raise wages more, the 8 percent mandatory wage rise is not a burden that SMEs can’t bear.

Magyar Nemzet learnt that the government will only call another meeting of the VKF before year-end if unions and employers request one. Next year’s minimum wages for skilled and unskilled workers will be codified in a decree published in the official gazette on the last day of December.