Hungarian minimum wage is worth terribly little: even Romania is ahead of us

The Hungarian minimum wage has not been very competitive compared to the rest of the European Union even before. But with the current brutal price rises and inflation, it is almost impossible to live on the Hungarian minimum wage.

Low minimum wage

2023 started with an increase in the minimum wage. The question is, however, how competitive the current HUF 232,000 is with the minimum wages in other European countries, Pénzcentrum writes. According to the newest data of Eurostat, it is not competitive at all, to say the least. Calculated in euros, even the Romanian and Slovakian minimum wages are higher than those in Hungary. (The Hungarian minimum wage of HUF 232,000 is now EUR 595, but Eurostat’s data is different because of the strengthening of the forint.)

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Three groups considering minumum wages

22 of the 27 EU countries have a minimum wage, with Cyprus having just introduced it at the beginning of this year. However, there are huge differences in the amounts paid, according to a recent Eurostat report. The minimum wage is the lowest in Bulgaria (EUR 399) and the highest in Luxembourg (EUR 2,387). When measured in euros, the countries can be divided into three groups, according to Pénzcentrum. These three groups are the following:

1. The first group includes Member States where the minimum wage exceeds EUR 1500 a month. Countries such as Luxembourg, Germany, the Netherlands, Ireland and France are in this group.
2. In the second group are the countries where the minimum wage is between EUR 1,000 and EUR 1,500 per month. This includes Slovenia and Spain.
3. The third group includes countries where the minimum wage is less than EUR 1,000. This includes Cyprus, Portugal, Malta, Lithuania, Greece, Poland, Estonia, Czech Republic, Slovakia, Croatia, Latvia, Romania, Bulgaria and Hungary.

Hungary is ahead of only Turkiye and the Balkan countries

With a gross monthly minimum wage of HUF 232,000, Hungary is only sixth from the bottom of the Eurostat minimum wage league table, ahead of only Montenegro, Turkiye, Serbia, Bulgaria and Albania.

Hungary’s minimum wage of EUR 578.74 is lower than in Slovakia, Croatia and even Romania. Pénzcentrum reminds us that the tax burden varies widely from country to country. For example, most countries with lower minimum wages than ours, such as Serbia and Montenegro, have lower personal income tax rates and some countries still have tax-free minimum wages (as Hungary did for a long time).

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The Hungarian minimum wage is hardly enough for the minimum

From 1 January 2023, the gross monthly minimum wage in Hungary is HUF 232,000. The new minimum wage represents a 16 percent increase compared to the previous HUF 200,000 (EUR 513). According to a recent survey, the Hungarian minimum wage is only just enough to provide a minimum standard of living. The study of 67 countries compared, among other things, the prices of basic foodstuffs with the minimum wages in those countries. This was done using a basic food basket.

The value of this basket in Hungary at the beginning of 2023 is HUF 36,820 (EUR 94.5). That is 37.1 percent more than at the beginning of 2022. The price of the basket now is 23.9 percent of net wages. A year ago, the same basket was worth 20.2 percent of the minimum wage at the time. This means that the 16 percent increase in wages for the lowest earners has lagged behind the rise in food prices.

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Source: penzcentrum.hu, Eurostat