Breaking: A groundbreaking step in Hungary’s wage negotiations for 2025

At the latest meeting of the Permanent Consultative Forum for Hungarian Industry and Government, another meaningful step was taken towards determining the 2025 minimum wage and guaranteed minimum wage. While a final agreement has not yet been reached, the drafting of the final text is already underway which is an encouraging sign of progress.

Throughout the discussions, both unions and employers have made compromises to close the gaps that have surfaced in recent weeks. According to 24.hu, optimism is growing, fuelled by the participants’ willingness to meet halfway and the emerging framework of a three-year wage agreement that could bring much-needed stability to the labour market.

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Economic challenges and considerations

Economic realities have significantly shaped the negotiations. Third-quarter GDP data revealed weaker-than-expected performance, putting added pressure on discussions. Employers, facing these economic challenges, struggled to support the initial proposal for a double-digit wage increase.

While the idea of a 10% rise was widely seen as too steep, a more modest 8% increase was deemed feasible by many. That said, employers have not ruled out higher increases entirely, but they have set clear conditions. Many are looking to the government for support, such as tax cuts, to offset the financial impact. The final outcome will heavily depend on how these economic factors are managed and whether unions’ demands can align with what employers and the government find sustainable.

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The current state and goals

There is broad agreement between trade unions and employers on the need for a long-term wage framework, with the ambitious goal of raising the minimum wage to 50% of the average gross wage by 2027. Achieving this will require a concerted effort from unions, employers, and the government. A multi-year agreement could provide much-needed stability, offering businesses and workers predictable wage growth.

Under current plans, the minimum wage is set to rise by 10%, with the guaranteed minimum wage increasing by 7% from the 1st of January 2025. According to Világgazdaság, this would see the minimum wage grow from its current gross value of HUF 266,500 (EUR 655) to HUF 293,150 (EUR 720), and the guaranteed minimum wage increase from HUF 326,000 (EUR 800) to HUF 348,820 (EUR 850). These changes will affect a substantial number of workers—particularly the guaranteed minimum wage increase, which could impact 700,000 to 750,000 individuals.

While these adjustments will place a considerable strain on businesses, they also mark a step closer to aligning Hungarian wages with European standards. Over time, these increases could improve the quality of life for low-wage workers and contribute to higher average earnings, ultimately benefiting the broader economy.

The negotiations so far

Negotiations are set to resume on Wednesday, with participants expected to consult further with their respective organisations beforehand. The League of Trade Unions’ leader has expressed confidence, calling an average annual increase of 12% over three years a realistic target. Encouragingly, all sides appear to be converging on their positions. While details remain under wraps, a growing willingness to compromise is evident. Whether all stakeholders ultimately agree remains uncertain, but optimism surrounds the possibility of finalising key issues in the next round of discussions.

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