Based on trade union feedback, there is a significant variance in wage increases: there are firms where there will be little or no increase, with the majority having above-average increases, and some where they are well above it.
From February, the minimum wage and the minimum wage will increase by 4 percent, ie by 3.67 percent annually due to the absence of January. In total, well over one million workers will be affected by the increase in minimum wages, according to the Portfolio, but the announced 4 per cent mandatory minimum will also have an impact on the wage bargaining of others.
We asked the trade unions what agreements have been reached so far in each company or sector. A mixed picture has emerged, but overall, based on the data so far, it appears that, on average, wage increases will be higher almost everywhere on average.
It is also clear from the above-average increase that the Hungarian Trade Union Confederation (MASZSZ) was right not to sign the wage agreement. We think a higher raise should have fit in as well
He told 24.hu László Kordás President. He added, justifying it Mihály Varga Finance Minister also said yesterday that the economy will soar in the second quarter of this year. Based on this, the union is waiting for when wages will also soar.
On average, a 5-6 percent increase is outlined
As for the specifics, according to the union leaders interviewed
an average wage increase of 5 to 6 percent can be expected, but the variance is large.
One extreme where there is little or no raising. Kordás mentioned municipal companies and enterprises close to municipalities as examples. Among them, the large companies (eg BKV, FKF) also received offers to raise around zero, as the maintainer is not able to improve wages due to the deductions. These companies employ a lot of people, the tension is high.
There is no revenue in the tourism and hospitality and hotel industries, and there is no talk of a salary increase.
At the other extreme are companies that have been less affected by the crisis, have been able to resume production after possible spring shutdowns, and have little impact on the epidemic on revenues (e.g. in the automotive industry and its suppliers). The trade union was able to achieve good results in these companies, an 8-10 percent increase is not uncommon – the president of MASZSZ introduced.
VDSZ: there are places where they have also undergone a minimum wage increase
The problem with raising the minimum wage and the minimum wage by 4 percent is that employers went down very quickly, often by 2-3 percent, but there are places where they started with a zero percent offer.
– the president of the Hungarian Trade Union Confederation of Chemical, Energy and Related Professions (VDSZ) told 24.hu, Tamás Székely.
However, in the area of operation of the VDSZ – with the exception of car transport – the plants worked continuously even during the coronavirus emergency, production did not slow down. But more multis are financing the losses of the external shutdown from the Hungarian profit – the President flashed out one of the consequences of the pandemic.
This is also unacceptable on the part of the VDSZ, but even the 4% increase is in itself. In many places, however, it has been agreed that a 4 per cent differentiated increase will come to the 4 per cent fixed. So far, about twenty-five of the 200 companies have agreed on the area of operation of the VDSZ, with an average result of well over 5 percent.
Some examples of wage agreements so far:
- 4 percent fixed increase + 3 percent differentiated (depending on performance or wage market position),
- 8 percent fixed + 2 percent wage market catch-up,
- 6 percent fixed now + 1 percent from July if social contribution tax decreases,
- 7.5 percent differentiated raise, that is, nothing fixed, there will be someone who will not receive a raise, there will be 15 percent, the rest between the two,
- 3.3 percent fixed inflation-following increase + 3.2 percent differentiated,
- 3 percent salary increase + HUF 60,000 increase per year at the cafeteria.
They expect that they will not be able to reach an agreement with all companies and that there will still be serious tensions in wage negotiations.
Vasas is doing well with the wage agreements
In the area of the Vasas Trade Union Confederation, wage negotiations have accelerated since January, they are present at 208 companies, of which about 170 have regular wage agreements based on collective agreements, this year they have reached an agreement with about 70 percent, and the circle is constantly expanding. Zoltán László Vice President. A later agreement may be reached for companies that have their business year round in March-April.
A retrospective agreement has also been a feature for some time, but while it used to drive water to the union mill, this is not the case this year.
In 2021, they will rather worsen their bargaining positions if the wage agreement drags on because the business sentiment is not optimistic.
There are also nine companies that will not have a wage increase now – they want to return to it in the second half. At Vasas, the picture is also mixed, with two large groups outlined. In one, the increase is typically between 7 and 12 percent, and in the other, between 3 and 6 percent. There is no passage, or companies give an increase of less than six percent, or more than seven percent.
The increase will be smaller at the end of the supply chain
The larger wage increase is mainly characteristic of automotive and electronics companies working in the automotive industry. The smaller ones are, for example, other types of metal companies, other suppliers related to the automotive and mechanical engineering industries (such as car upholstery manufacturers), and third-to-fourth-tier suppliers further down the automotive supply chain that produce low value-added and low profits.
Automakers typically marketed products that were ready or semi-finished, forcing companies at the end of the supply chain that produce to a semi-finished state to shut down for extended periods of time. This is also why there is no stock now, so if someone were to buy a new Suzuki, for example, they could wait half a year for it.
Suzuki announced in February that they will have an 8 percent pay rise. A three-year wage agreement was reached at Audi in Győr in March last year, a total 36 percent increase in income was announced for the period between 2020 and 2022, and a two-year agreement was signed at Mercedes in Kecskemét last December, which included a total basic salary increase of HUF 90,000.
Zoltán László according to there is another well-defined circle of employers, typically employing 400-600 people, and their activities were not significantly affected by Covid, their numbers were good last year, yet they do not want to give higher-than-average wage increases, citing the crisis situation. László mentioned a can factory as an example, saying that the trade union is still wrestling with similar companies. At B. Braun Medical Kft., A manufacturer of disposable medical devices, the situation has deteriorated to the point where the local union has set a two-hour warning strike on February 23rd. At the Gyöngyös company, which employs 1,600 people, according to the official announcement, the interest group is fighting for a “worthy wage increase”, but negotiations have stalled. Zoltán László knows that B. Braunt was not battered by the pandemic, but did not react at all to the union’s proposal to increase wages.
So far, the future has been priced in, now more the past
Zoltán László mentioned an important change in approach: while the future has been priced in wage increases in the last few years, now the rate of this year’s wage development is derived from last year’s results. There is a risk for companies in this, according to the union leader. This is because if, due to the negative results, wage growth is now low and not flexible enough later, in addition to dynamic growth, they may lag behind wages, which is a disadvantage for labor retention.
So far, for example, within industrial parks, people have been looking in much the same way, but this has now tipped over. Vasas sees great differences on the one hand due to differences in the strategic thinking of employers and on the other hand because different companies base their wage development on the future or the recent one. Employers are not thinking uniformly now, which is a serious challenge for unions.
As we reported, there are also several companies in the trade where they have already agreed on this year’s wages, such as Aldin and Auchan, although the latter was not satisfied with the union in several respects.
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