MKIK: wage increase and growth potential

According to László Parragh, companies that pay their employees well have strong growth potential

It is important that there are more and more companies in the Hungarian economy that pay their employees well, so they receive a strong growth potential in return - emphasized the president of the Hungarian Chamber of Commerce and Industry (MKIK) in Kossuth radio's Sunday newspaper program.

László Parragh said this in connection with the fact that the representatives of the government, employers and employees reached a situation close to an agreement during the discussions held this week within the framework of the Competition Sector and the Government's Permanent Consultation Forum (VKF), so that next year's minimum wage will be HUF 200,000 gross, the guaranteed minimum wage and it would rise to HUF 260,000.

The president of the chamber recalled that the minimum wage was considered a cost element after the system change not only in Hungary, but also in the entire Central European region. The point was for the employer to pay as little as possible. According to the president of MKIK, this is slowly changing and employers increasingly understand that the minimum wage goes far beyond the cost element.

The president of MKIK mentioned as an example the Western European model, where wages are raised slightly above inflation, thereby generating development that improves the competitiveness of companies.

László Parragh also pointed out that, according to MKIK's previous measurements, the strong wage increase did not limit economic growth. At the same time, he added that there are large differences between sectors and industries in terms of wage costs.

By reducing employer contributions by 4 percentage points, the employer's burden would decrease to 13 percent from January 1, and the small business tax (kiva) rate would decrease from 11 to 10 percent. The president of MKIK considers this compensation to be adequate, which helps companies manage wages while preserving the state budget's functionality.

Source: Origo.hu

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