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Left miscalculates again, as inflation won’t hurt lowest wages

While public life on the left is loud with the argument that salaries in Hungary are humiliatingly low due to the government’s fault, and it has resulted in a cost of living crisis, the reality is completely different. A good example is that in two years, including this year as well as 2022, the real value of both the minimum wage and the guaranteed wage minimum has increased. The value of even the lowest of wages is rising in a period when the war, the botched EU sanctions and global economic trends are all boosting inflation.

We can see a rise in the real value of the lowest Hungarian wages in 2022 and 2023, daily Magyar Nemzet writes. The statement probably would not turn heads in peace-time (considered in the strict sense of the word), but it now has special significance. The Russia-Ukraine war breaking out out last year and the botched EU sanctions introduced in response have both caused the price of energy and food to rise, with certain processes of the global economy also boosting inflation. Here are the numbers.

The numbers speak for themselves
In Hungary, the minimum wage increased by 19.5 per cent, while the guaranteed minimum wage rose by 18.7 per cent in 2022. The growth also continued this year, with the former rising by another 16 per cent, and the latter by 14 per cent.

This also means that during these two years, the minimum wage rose by 38.6 per cent overall, while the guaranteed minimum wage went up by 35.3 per cent.

Meanwhile, inflation was 14.5 per cent last year, and is estimated to be around 15 per cent this year. Based on all this, the real value of the minimum wage may increase by 5.3 per cent and the guaranteed wage minimum by 2.8 per cent over two years, from 2022-2023. This is a significant result worth repeating – at a time when, in addition to a global crisis, war is raging in a neighbouring country, and the Union is making it difficult for its own economy to function with misguided sanctions. It should be mentioned here that, in addition to the improving wage conditions, the utility bill reduction scheme is also helping families, with the government’s measure leaving HUF 181,000 (approx. EUR 450) in the wallets of every family.

Since 2010
It is also worth devoting some time to examining how the real value of the smallest earnings developed. Statistics show that since 2010, the real value of the minimum wage and the guaranteed wage minimum has increased for the most part. Between 2010 and 2023, the real value of the former increased by nearly 78 per cent, and the latter by approximately 87 per cent.

And under former leftist PM Gyurcsany?
It’s also worth recalling how the minimum wage issue was handled by Hungary’s disgraced former PM Ferenc Gyurcsany during the last big economic crisis.

At the beginning of 2008, under the leftist government, which is now talking about an cost-of-living crisis and humiliatingly low wages, the minimum wage was HUF 69,000 (about 173 euros). In the second half of the year, the crisis hit with brutal force, and on 1 January 2009, the minimum wage was raised by precisely HUF 2,500 (about 6 euros).

A year later, when half the country was desperately searching for a way out of the foreign currency loans and unemployment, the minimum wage increased to a whopping HUF 73,500 (about 184 euros) after another bold raise of HUF 2,000 (5 euros).

The above facts signal an obvious difference between the two governments’ crisis management methods.

V4NA

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