Tamás Cserép | Apr 19, 2019 | 1
If the wages don’t get raised, it will get worse and worse for everyone
Fearsome data has been published in the last few days. Firstly, the Economist published a diagram which shows that Hungary is in the first place on the list of unfilled jobs in Europe. Then, VS.hu pointed out that companies don’t even bother to advertise empty stands, they have stopped labour recruitment because they don’t find suitable employees. Kettosmerce.blog.hu looked into the matter thoroughly.
They write that the leader of a company in the refrigeration industry complained that there aren’t enough engineers who they could employ. At this point we should recap the news from the summer which informed us that there was a shortage in seasonal workers so the jobs were filled with students. In one case, the whole staff of a restaurant quit and went to work in Austria. The government responded with the change of a law which now enables obligatory labour service for seasonal workers.
And this doesn’t only affect the private sector. Most places for family doctors have been unfilled for years, underpaid public service employees are constantly leaving their jobs and emigrating. Just think about nurses, social workers or public cultural employees whose net average income doesn’t reach 100 thousand forints.
We are slowly getting to a phase where in certain fields the shortage of labour endangers the safety of sustenance, whereas in other fields the emigration of qualified labour force limits economic growth. Many multinational firms have chosen neighbouring countries instead of Hungary due to the shortage of qualified labour force.
What causes this situation?
The emigration of qualified labour force is the biggest reason of the difference in income between Hungary and other West-European countries. This difference seems to be turning into a cleft. Low wages paired with bad labour conditions and weak rights for employees would be enough motives in themselves. If someone can earn much more abroad and speaks the language even just a little bit, why stay in Hungary? For a long time, the powerful upper-class didn’t believe that this could happen because data showed that the Hungarian labour force isn’t that mobile (they don’t speak foreign languages). But economics and social sciences have always been tricky. Nothing is visible in the beginning but when the absolute level of difference in income reaches a critical point, things start up. If the stake is big enough, one would learn Chinese in three days, right?
The process of emigration accelerated when Germany’s and Austria’s moratorium ended in 2011. People chose these new gates with hopes for a better life.
What didn’t help either is that the reigning government from 2010 shapes/shaped the national economy into works of low qualified workers. The high level of corruption, the shortage of efficiency in the polity, the unpredictability, the separate taxes and other bad elements of political economy lead to the decay of the competitiveness of the Hungarian economy. This decay came with the sticking of productivity. Low productivity limits the maximum of income. Compared to other states of the region, the Hungarian net average income has been dropping in the last 5 years. For instance, Slovakia passed us in the beginning of the year.
It is inevitable to fall into line with our wages. Many people say that there is place for this because it would be possible to rearrange incomes in favour of labour. At the same time, it is a fact that until a worker can’t be as productive in a Hungarian factory than in a German one, the worker’s wage cannot be higher here.
But as we know, it is a worker’s job to create the relations that define the productivity…
This is where we get to another circle of problems, which is related to everything mentioned above. This is the ruining of the Hungarian education system which has been going on for years now. Between 2010 and 2014 our GDP went from 6% to 4,8% when looking at the money spent on education. There is no other country in the European Union that spends so little on education!
All the while, the government promised to set up quality vocational training, but didn’t succeed. Andragogy and re-training systems seem to be using up EU sources instead of passing down knowledge. Only a small part of those who finished trainings like this are able to find jobs. A good example of this is the scandal of the summer about the First Hungarian Social Society who used up almost the whole of EU funding for andragogy and creation of jobs in a few months, then disappeared off the face of the earth.
The penitentiary nature of social policy and poverty itself balks the increase of participation in education and qualification. Intention is not enough to get a job. Without enough money to eat or use the public transportation, it is much harder to study or find a job… And of course, one always thinks of its children when choosing a new home: if it’s impossible to acquire knowledge and live a good life here, you need to go to Germany, Austria or somewhere because at least let the children make their way in life!
What is the solution?
Consequently, the solution is that the wages need to be raised to stop the emigration of qualified labour force. This is partly the question of political will, but the most important element is the need of a more competitive and productive economy. In the mid run, the key of productivity lies in making the polity flexible, creating the limits and a sufficient infrastructure, stepping up against corruption, introducing a new tax system, making public procurement transparent and so becoming an economically developing country. In the long run only hundreds of billions of forints, the re-establishing of healthcare and social supply system and the elimination of poverty can provide the conditions for a higher productivity.
The current course of proceedings shows that this will all lead to the crash of the Hungarian economy due to the high emigration rate, which goes back to underpayment. We somewhat see what will happen to anyone who can and leaves the country. But what will happen to those staying here?
translated by Alexandra Béni