Labor market potential: Hungary in the bottom group

The Warsaw Enterprie Institute has developed a Labor Market Power Indicator for the Three Seas countries, which takes into account the demographic structure of the societies, their competencies and the business environment. Hungary is ranked 10th. Which country is ranked highest? Here is their report.

New phenomenon: Labor Market Power Indicator

The result of the clash between declining labor supply and low productivity growth will be global competition for people among the countries around the world. Countries that can offer companies a better demographic structure, a better-educated workforce, greater ability to attract immigrants and lower employment costs will avoid stagnation. 

Our Labor Market Power Indicator takes into account all the factors mentioned above. Its final score, placed on a 100-point scale, is meant to be a proxy for how particular countries are performing and a predictor of how they will handle themselves economically. We have included only the Three Seas states.

The Three Seas region is a recently (2015) established initiative of 14 European Union countries:
Austria, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania,
Slovakia and Slovenia. They cover the territory spanning between the Baltic Sea, the Black Sea
and the Adriatic Sea – three seas from which the initiative takes its name.

Read alsoWhen guest workers realise life in Hungary isn’t roses all the way

Pragmatics was the decisive factor. On the one hand, we are connected with the Three Seas countries not only by history, culture or religion, but also by common economic interests. We wish that this 12-part bloc would be economically as strong and consolidated as possible; that economic growth in the Czech Republic, or Estonia, would at the same time be good news for Poland, or Romania.

For this to happen, however, further economic integration according to the best possible patterns is needed. Our indicator, which highlights the differences between the Three Seas countries, is intended to be helpful in finding such patterns. Our Indicator is based on pillars that take into account data from a set of all European Union countries – the evaluation with its help of the Three Seas countries is therefore placed in a broader, pan-European context.

Read the full report HERE.

Key findings

• The richest is not the best. Austria, the richest country in the Three Seas Initiative, is not the strongest in terms of labour market potential. It took a mere 8th place.

Read alsoMore Hungarians working in Austria than ever

• Poland better than Austria, but only in the middle of the ranking – in 6th place. We are negatively impacted mainly by demographics and the lack of English proficiency among the elderly. Our strengths include a large percentage of people of working age and, among other things, relatively low labor costs.
• There’s nothing like the Czech Republic. The country with the greatest potential of the labour market turns out to be the Czech Republic.
• Wealth is not strongly correlated with labour market potential. Admittedly, countries with the lowest PPS GDP close the list, but low GDP does not automatically determine a low ranking place. An example is Slovakia, which has the second lowest GDP PPS in the group and was ranked 3rd in the Indicator.

Source: wei.org