The amount of the minimum wage and the guaranteed minimum wage may increase earlier than usual, already this year. The mandatory minimum wage will be 15 percent higher in December than the amount in November, and the guaranteed minimum wage tied to secondary education will be 10 percent higher.
In addition to the amount of the increase, the trade unions and the employers' interest representatives also decided in the past few days to bring forward the increase of the minimum wage and the minimum wage by one month, so that the salaries of those concerned will increase already in December, Mandiner learned.
According to the wage agreement concluded at the end of last year, the compensation is necessary because in 2023 the annual inflation will exceed the increase in the minimum wage and the guaranteed minimum wage.
Thanks to the wage increase, which was implemented a month earlier than usual, and due to its size, the lowest earners will avoid a drop in real earnings.
Although the trade unions, employers and the government are expected to finalize the tripartite wage agreement only in the second half of November, the parties have already agreed on the most important points. That means from December 2023
the minimum wage increases by 15 percent, from HUF 232,000 gross to HUF 266,800. The net amount calculated without discounts increases from HUF 154,300 to HUF 177,500.
The guaranteed minimum wage will increase by 10 percent, from HUF 296,400 gross to HUF 326,040, and HUF 197,100 to HUF 216,800 net.
Thanks to the increase that will be implemented from December, the salary of employees working for the minimum wage and the guaranteed minimum wage in December, received at the beginning of January 2024, exceeds the amount of a year earlier by more than HUF 40,000.
Sándor Czomba, the State Secretary responsible for employment policy at the Ministry of Economic Development, made it clear on the M1 program that the government does not support the previous proposal of the employer and employee side, that is, that the consumer price exceeding this year's increase in the minimum wages will be offset with a one-off payment of no more than HUF 100,000, tax- and contribution-free - rise.
Imre Palkovics, the president of the National Association of Workers' Councils, confirmed to Mandiner that the parties had indeed rejected the proposal for a one-time HUF 100,000 employer compensation. The payment of the amount would have been decided by the employers, which is why there would have been a risk that employees working for lower wages, primarily working in micro and small enterprises, would not receive compensation. In addition, the minimum wage workers are mainly employed by the smaller companies that would have found it difficult to receive a one-time benefit. The president of the Workers' Councils warned that the Magyar Nemzeti Bank (MNB) expects inflation between 4-6 percent by 2024.
According to all forecasts, the 15 percent increase in the minimum wage and the 10 percent increase in the guaranteed minimum wage will therefore exceed the rate of increase in consumer prices, meaning that the purchasing power of the lowest-paid workers will increase again.
In the years before the Russian-Ukrainian war and the Covid-19 epidemic, the purchasing power of Hungarian payments increased significantly. The aim of the trade unions is for the real value of domestic salaries to rise by at least 5 percent per year in the coming years, added Imre Palkovics.
In its forecast published at the end of September, the MNB expects inflation to be between 17.6 and 18.1 percent for the whole of 2023, and the annual price increase could already be in the single digits in November. And for next year, we can no longer expect a price rise similar to this year's, which has repeatedly set records: in 2024, inflation may remain in the range of 4-6 percent, while by 2025, in accordance with the goals of the central bank, it may be between 2.5-3.5 percent.
The purchasing power of the minimum wage is increasing despite the record high inflation environment.
While the two-year inflation may be around 25 percent overall this year and next year, the amount of the minimum wage in 2024 will exceed the amount in 2022 by 33.4 percent. The guaranteed minimum wage has not lost its value either, next year the amount will be more than 25 percent higher than in 2022.
Trade unions and employers are expected to finalize this year's wage agreement after November 15, in the light of the most important third-quarter national economic indicators.
Cover photo: Zsolt Szigetváry/MTI/MTVA
