A row is intensifying over the employment of guest workers, with business leaders warning that Hungary needs tens of thousands more each year, while Prime Minister Péter Magyar insists foreign labour should be sent home.
The dispute over guest workers has taken a sharper turn in recent weeks. Magyar argues that higher wages would draw inactive Hungarians back into employment, thereby easing companies’ labour shortages. Employers, however, counter that tapping domestic reserves alone will not suffice; indeed, they claim the economy requires not fewer but tens of thousands more foreign workers to function.
Economy at risk without foreign labour?
While the government maintains that wage increases offer the answer to labour shortages, sections of the corporate sector insist that industry, logistics and hospitality could not operate smoothly without guest workers. The debate has escalated into a war of numbers.
One of the strongest arguments from business leaders is that Hungary’s labour force has been shrinking for years. According to the head of recruitment firm WHC, around 100,000 foreign workers are currently employed in Hungary, yet even this falls short of demand. He estimates that an additional 30,000 to 40,000 workers would be needed annually merely to keep the economy from stagnating, as the number of active Hungarian workers declines by a similar margin each year.
Employers also argue that substantial wage rises would be no panacea. Such increases, they warn, could drive many businesses into insolvency while fuelling a wage-price spiral and rising inflation. For many in industry, the employment of guest workers is therefore not a choice but an economic necessity, according to Pénzcentrum.
Government insists on higher pay
The Prime Minister sees matters differently. Magyar contends that companies could attract more Hungarian workers by offering better pay. In his view, the long-term solution to labour shortages lies not in increasing the number of foreign workers but in retaining and bringing back Hungarian employees.
At the heart of the dispute is whether sufficient untapped domestic labour reserves still exist. While businesses acknowledge that such reserves are present, they argue they are insufficient and unlikely to provide a short-term solution.
Is there a hidden reserve?
Ádám Sebestyén, speaking on the Forbes Money podcast, suggested that Hungary may have a potential reserve of up to one million workers. However, mobilising this group would be highly complex. It includes not only the unemployed but also those only partially active in the labour market, such as mothers with young children, students, pensioners and foreign students.
Many of these groups are not easily integrated into existing sectors due to structural constraints. That said, broader participation could be achieved if employers adopted more flexible practices — for example, focusing on tasks rather than hours worked and rewarding additional effort with extra benefits.
At present, around 200,000 students and 40,000 pensioners work through co-operative schemes, while nearly 50,000 foreign students study in Hungary, many of whom also take jobs. WHC argues, however, that these groups alone could not fully replace foreign workers within the next six to twelve months.
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Guest workers still arriving
While the government emphasises wage growth and domestic labour activation, businesses stress that demographic trends and current labour market conditions make it impossible to dispense with foreign workers in the short term.
What is clear is that the Magyar government banned the issuance of new guest worker visas via intermediary agencies in June. Nevertheless, third-country workers may still enter Hungary if recruited directly by investing companies, such as Chinese car manufacturers.
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Featured image: depositphotos.com
If it is up to (international) businesses Hungary would be flooded with third world “guest workers” like in Western Europe. They serve their own interest not the interest of the Hungarian nation. This is the reason why companies can never have political influence.