Hungarian employers want to freeze the minimum wage

Employers said an agreement on next year’s minimum wage rise should be delayed because of uncertainty caused by the pandemic at a meeting of the VKF, a forum of employers, unions and government representatives, on Tuesday.

Ferenc Rolek, the deputy head of business association MGYOSZ, told MTI after the meeting that it “isn’t practical” to raise the minimum wage from January 1 because of the current degree of uncertainty. Employers propose talks on the increase should be postponed until the outlook for 2021 becomes more clear, he added.

At this point in time, he said,

employers don’t see a realistic chance to raise the minimum wage from January 1.

Rolek said employers calculated that the 8 percent minimum wage rise agreed on for this year would be offset by inflation, increased productivity and a reduction in the payroll tax.

While the payroll tax was cut by two percentage points and inflation was around 3 percent, productivity declined five percentage points, he added.

Rolek said the ongoing wage talks are “important and difficult”, noting that Innovation and Technology Minister László Palkovics sat in on the talks on Tuesday and indicated he would join talks to follow, too.

Imre Palkovics, who heads unions association MOSZ, said unions are proposing a 10 percent minimum wage rise for next year.

The VKF will next meet in two weeks.

The statutory minimum wage was raised by 8 percent in 2019 and 8 percent in 2020. At present, the gross monthly minimum wage for skilled labourers is 210,600 forints (EUR 580) and the minimum wage for unskilled labourers is 161,000 forints (EUR 443).

Wage growth in Hungary reached 9.9 percent year-on-year in January-August, the latest data from the Central Statistical Office (KSH) show.

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Source: MTI