Well, the strike is not complete because, believe it or not, BKV (Budapest Közlekedési Vállalat/Budapest Transit Authority) has twenty-six unions! Out of these, twelve decided against the strike. Their leaders prefer negotiations because they are convinced that a fair deal can be reached with management.
You might ask how it is possible to have so many trade unions at one company where the total number of employees is apparently 12,000. First, it is hard to tell how many of these employees are working in the field as drivers or mechanics and how many belong to middle management. I heard one bus driver who claimed that there are only 8,000 drivers and mechanics and the rest, that is 4,000, work in administration. Others dispute that figure and estimate that about 1,000 people are sitting in offices. Whatever it is, apparently there are too many of them.
In my opinion, the explosion in the number of trade unions came about as a result of a bad law. I read somewhere that as few as thirty people can form a union. But the real culprit in the proliferation of trade unions in state and municipally owned companies is the provision that the salaries of trade union leaders are paid by the company itself! It sounds ludicrous but that is the case. The trade union leaders whose very handsome salaries come from the company are called "függetlenített szakszervezeti vezetők" (independent trade union leaders). At first I didn't even understand the term. "Independent" of what? Then I read a bit of the history of this phenomenon and came to the conclusion that in the socialist period some trade union leaders were freed of other duties in order to devote themselves to the administration of the trade union. However, in those days there were no strikes, and the main occupation of the trade union leaders was making sure that the employees have a two-week holiday in one of the villas owned by the trade unions or by the company itself. Nowadays trade unions function as real trade unions and the ridiculous situation presents itself that the trade union leaders, paid by the company, are organizing strikes against their own employers.
In the media one often hears that the financial affairs of BKV are inscrutable. However, according to an economist, József Papp, who just joined the company's board as an independent expert, the finances of the company are not that terribly difficult to fathom. According to him, BKV receives 60 billion forints from the sale of tickets and season passes. The Hungarian government gives 32 billion a year in subsidies. In the last few years the City of Budapest also gave BKV 10 billion a year. However, all that money is not enough to maintain service. Every year there is a shortfall of about 30 billion.
A few weeks ago the government and the leaders of the City of Budapest agreed on an additional 28 billion forints to help BKV out in 2010. Thus, while BKV's actual income is 60 billion forints a year, subsidies for 2010 are 70 billion. A ticket today costs 320 forints ($1.75 or €1.20) to the user, but the actual cost of that ticket is 660 Ft ($3.60 or €2.50) which is far too high. I should mention that in New York one can get a subway or bus ticket for $2.25.
According to Papp one problem is the high cost of labor. The entire amount that is received in ticket sales is sufficient to cover only salaries and payroll taxes. Without help, there would be nothing left to run the buses or for capital investment. The national government subsidy in effect relieves the company of its payroll tax burden; the 32 billion BKV receives from the government is the exact amount it owes the government in the form of payroll taxes.
Apparently the average salary at BKV is higher than the average pay in the city in general. Moreover, there are too many richly compensated employees in the administration. That must change because otherwise BKV's financial problems will only perpetuate. Papp recalls that he read an interview with Erik Bogsch, CEO of Richter Gedeon, the pharmaceutical company, that used to be a typical socialist company with a huge staff. Twenty percent of the employees had to let go in order to run the company economically. Something like that would be necessary in the case of BKV.
There was also mention of the entitlement to free use of all sorts of transportation for people over the age of sixty-five. That "gift" to the pensioners came from Gyula Horn's government, and pensioners still gratefully remember their benefactor. However, as it turns out and something that I didn't know, no one reimburses BKV for these free rides. The free use of transportation is really a part of people's pension that shouldn't be borne by BKV or any other transit authority. In a country where 42% of the adult population supports the rest (58%) no such entitlement should exist. Those who need supplemental help should receive it on an individual basis. Apparently in Sweden there is such a system, but there 58% of the population maintains the rest (42%).
According to József Papp, the first step should be a drastic reduction in the administrative staff. Most likely fewer runs could be also considered although I can well imagine the reaction of the inhabitants of Budapest to such a suggestion. As it is, they complain bitterly about the state of the buses which are apparently old and decrepit. Hundreds, if not thousands, of new buses should be purchased. As long as twenty-year-old buses are being used that spend half their lives in the shop the quality of Budapest's transportation will not improve. Perhaps a few more minutes of waiting for the bus is worth having a clean, new, comfortable ride.
In any case, the strike of the fourteen trade unions began at midnight and as far as I know it is still going on. István Gaskó, head of one of the MÁV trade unions, is organizing a sympathy strike. BKV says that they made their last offer and if it is not taken they will have to let people go. We will see what happens in the next few weeks. According to some, the strike doesn't really serve the interests of the members of these fourteen trade unions. It is, some people claim, politically motivated. In other words, the trade union leaders are helping Fidesz just before the elections. Who knows. Fidesz is very quiet about the strike. But it certainly helps their cause.