László Perlusz, Secretary General of the National Association of Entrepreneurs and Employers when contacted by Portfolio, he said that they were going through a very difficult negotiation.
I know that every year we say that it was not easy, but this was emphatically difficult because the international environment is uncertain. For this reason, we proceeded with caution
László Perlusz shared his insights. We defined a 3-year curve for wage catch-up, in which we agreed on the steps in which we envision raising the minimum wages until 2027.
Portfolio was the first to write that next year the minimum wage will increase by 9 percent and the guaranteed minimum wage by 7 percent. The minimum wage will rise to HUF 290,800 gross from January 1, 2025, the minimum wage, also known as the minimum wage for skilled workers, will rise to HUF 348,800 gross.
According to the general secretary of the National Association of Entrepreneurs and Employers, the wage increase agreement is ambitious, especially if we look at the economic developments of the last 2 years.
In 2023, there was an economic decline of 0.8 percent, with inflation of 17.6 percent, and this year GDP expansion is expected to be barely 0.5 percent, with inflation close to 4 percent.
Last year’s recession and high inflation shattered the economy. We can say that the employees actually receive compensation – László Perlusz opined.
We believe that most companies can manage this. However, we consider it very important not to pull the strings further in the management of companies
László Perlusz emphasized.
In the past 2 years, 1,000 social enterprises have ceased to exist every month. There are 23-24 thousand fewer companies than 2 years ago.
If this accelerates, it will seriously threaten employment. The trade unions also had to understand this during the negotiations, explained the general secretary of the National Association of Entrepreneurs and Employers.
He noted that the 3-year wage agreement can be considered optimistic not only because of the Hungarian economic performance of the past 2 years. The expectations also point in the direction that the international environment must improve substantially in order to meet the economic growth and inflation expectations.
“Due to the escalation of the war, the country risk is now extremely high, as are the interest rates, and the inflow of working capital has dwindled. It would be very important for the markets to calm down,” László Perlusz outlined his concerns regarding economic expectations.
According to a previous study, every 1 percentage point increase in the minimum wage also increases average wages by 0.3 percentage points.
said Perlusz. Of course, this can vary from industry to industry, but it is certain that raising the lowest wages will raise average salaries, if only because managers within companies want to avoid wage congestion, i.e. the situation where the salaries of less qualified and experienced employees are too close be compared to those of more qualified employees.
Regarding the regional wage competition, he noted that it does not depend on the extent of the minimum wage increase or the guaranteed minimum wage increase, as to how well the domestic workforce can be retained.
“It is not primarily the unskilled or less-skilled workers who are recruited. It would be much more important to increase productivity in the domestic economy, because in this way larger wage increases could be implemented,” László Perlusz opined.
We are glad that the government is trying to keep small companies on their feet with capital subsidy programs and other measures. However, it would also be important for companies to spend as much as possible on modernization, digitization, and the use of artificial intelligence, because this is the only way they can survive in the longer term, he explained.
According to the main rules of the 3-year wage agreement, wages can be renegotiated in autumn at the Permanent Consultation Forum of the Competition and Government.
Then, in addition to the economic data of three quarters, they can discuss what has been realized from the plans, either in terms of economic growth or inflation. According to László Perlusz, however, if after the first quarter they find that there is a significant discrepancy between the plans and the reality, there is no obstacle for them not to re-negotiate.
The cover image is an illustration. Cover image source: Getty Images
Source: www.portfolio.hu
