The Central Statistical Agency says the subsistence level for 2013 was a monthly income of at least HUF 87,510 to “permanently satisfy the minimum needs for the conduct of life”. In recent years even those with jobs have found it difficult to achieve this living standard. The left-leaning Policy Agenda compares the situation to before the economic recession.
An increasing number of employees earn below the subsistence level
The state National Labour Office’s individual earning and wage statistics reflect that 25% of employees earn under the subsistence level. Calculating without the tax allowances for families, they do not earn more than a gross HUF 134,500 a month.
Before the recession, in 2008, the proportion of those earning under the subsistence level was 18% in the whole national economy. It suggests that there are more who do not earn enough to satisfy their meagre needs.
It is important to know that the statistics on earnings consider only those employers that have less than five employees, so if the less solvent micro enterprises were taken into account, then the situation would surely be worse. According to an optimistic estimation made by Policy Agenda, one million workers take home less monthly income than needed to reach the subsistence level.
Wages ‘consumed’ in the public sector
Considering the figures it is also revealed that salaries deteriorated most in the public sector. In 2008, 4% of public employees earned less than subsistence. As a consequence of “frozen wages”, this grew to 16% by 2013. It indicates clearly that the position of the public sector weakened.
The current government can be excused for the stop-gap measures taken in recent years that have helped to decrease the number of those earning under the subsistence level from 19% in 2010 to the 16% mentioned above. Nevertheless, it is also true that in the same government term wages in an entire branch of the public sector (namely those employed in social attendance) fell below subsistence.
In the competitive sector the situation is less dramatic, still it is worse than before the crisis. In 2008, 24% of employees in enterprises earned less than the subsistence level, but last year this ratio was 30%. So the government has made the situation even worse, whereas at its election in 2010 the ratio was 25%.
It must be added that the national statistics on individual earnings examine only the month concerned. The annual average would be somewhat better if end-of-year bonuses were taken into account. However, these are just optional and are not granted under the labour contract. The workers cannot count on such revenue.
The poverty of workers is also reflected by the fact that, in 2008, a family with an underage child and earning two minimum wages had an income HUF 52,000 less than the subsistence level projected for such a household. This worsened to HUF 60,000 by 2013.
What happened to the pensions?
When calculating subsistence, households with active earners and households earning pension are differentiated. In the latter case the monthly subsistence per capita is HUF 78,759.
The pension statistics of the state show that 21% of old-age pensioners earn below subsistence. Pre- crisis this was 19% (considering also the effect of the 13th-month bonus pension), which suggests that living conditions of the retired with low pensions has worsened compared to the year before the recession.