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.
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.)
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:
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).
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.
Source: penzcentrum.hu, Eurostat
Minimum wage is always a contentious issue. Here in Canada we know that you have to work at least 60 hours each week to live comfortably and more to get ahead. Not just lawyers, doctors or CEOs do that, we who want nice homes & a bit of travel have to as well. That creates a lot of unbalance for people who have to work at 2 or 3 jobs to be able to get those hours in, like I always did as a single mother and even later as a young senior, who had to travel to take care of elderly parent every winter for 5 years. Many seniors still have to work to supplement their pension, and often minimum wage jobs are the only ones that they can get if they are not techy enough for modern business needs. With shortage of workers, companies are glad to have us!