The causes of the low Hungarian employment figure

Because I know that the highest unemployment can be found in the group with the lowest educational attainment I figured that the problem in Hungary was that there were too many people with inadequate education, which nowadays means less than twelve years of schooling. It turned out that I was wrong–if, that is, we can believe comparative sociological studies.

On March 10 the Táncsics Foundation of MSZP, which is headed by Ferenc Gyurcsány, held a conference where three scholars gave lectures on their fields of expertise. One talked about economics, another about the future of pensions and retirement and the third, and this is what I would like to focus on here, about the low rate of employment and its causes.

It was Balázs Krémer, a sociologist, who gave a very interesting lecture on the connection between employment and educational attainment. Every time we talk about low employment figures two problems crop up. One is the very high number of people who receive disability payments and the other is the connection between low educational attainment and unemployment.

Let's start with the problem of "disability pensions" (rokkantsági nyugdíj). The number of people receiving such pensions is truly staggering: 11-12% of the population between the ages of sixteen and sixty-four. Clearly it is impossible to have so many disabled people in a European society. The major reason for this staggering number was a mistaken government reaction to the unemployment crisis that occurred right after the change of regime. The Antall government decided to shove a great number of unemployed people into the category of disabled after their unemployment insurance ran out. Lately it is much more difficult to get disability payments, but only a few days ago the authorities found a number of doctors who for a fairly hefty sum were ready to declare people with no qualifying medical condition disabled.

Seventy some percent of Hungarians are convinced that most people on disability are robust and healthy people who just don't want to work and fake their illnesses. However, a large number of those who received disability status twenty years ago are close to retirement age by now and thus are most likely not fit to work, especially after such a hiatus in their employment. The Orbán government's somewhat rash announcements about a serious curtailment of disability benefits most likely would affect only about 100,000 people. The question is what to do with these people after their disability payments come to an end. The simple answer is: they should go out and work. But where? There are about 600,000 unemployed people at the moment in Hungary.

Krémer at this point moves on to the low rate of employment in the age group between 16 and 64. Most of the "inactive" people come from the group with low educational attainment. The employment rate of people with college degrees is about the same in Hungary as elsewhere in Europe. But among those who didn't finish high school the rate of employment is dismal. The next question Krémer tries to answer is whether the generally low rate of employment is due to an unusually high number of people who don't have at least twelve years of education. But that doesn't seem to be the case. Just to give an example, the educational attainment of Portugal is really low: 69% of the population didn't finish high school. But in Hungary it is only 24% of the population. Hungarian statistics are also good when it comes to the number of years completed in an educational facility. Here again, within the European Union Hungary is above average.

Krémer then looks at the actual knowledge acquired in Hungarian schools and, although we know that Hungary is no Finland or Korea, according to the PISA tests Hungarian children at the age of fifteen are above average in Europe. They are better than children in Luxembourg or Austria.

So, asks Krémer, what is the problem then? Perhaps in the developed countries there is no need for workers with low educational attainment. Perhaps the Hungarian economy developed too fast. No, exactly the opposite is true. He found that in countries with higher GDPs the rate of employment of the group with lower educational attainment is actually higher than it is in those with lower GDPs.

So, says Krémer, we must consider the possibility that the problem is on the supply side. And he found important clues in the inflexibility of the workforce and the absence of life-long learning. The Organization for Economic Co-operation and Development (OECD) considers any form of adult learning over and above of normal schooling, from preparing to be a hairdresser to studying a foreign language, "continuing education." The statisticians of the OECD looked at the group between ages of 25 and 64 and found that the European average was 41%. So, almost every second adult was learning something in his spare time or in between periods of employment. The Swedes headed the list with 73% while the penultimate country was Greece. And which country was the very last? Hungary, with 9%!

Krémer thinks that adult education is a sign of wanting to get ahead. Where people have higher ambitions they are more likely to take the initiative and engage in some kind of activity that gives them an edge. Krémer thinks that in Protestant countries this tendency is stronger than in Catholic countries (that good old Protestant work ethic). At the bottom are countries of Orthodox Christianity. Interestingly, Hungary, which in spite of the presence of a fairly large Protestant minority is basically a Catholic country, in this respect ranks among the countries where the Orthodox faith is prevalent: Greece, Romania, Bulgaria.

So, continues Krémer, the problem has its origin in cultural heritage. People in Hungary are not ambitious enough. They are satisfied with their lot. Their current lot is their fate. Nothing can be done about it. They don't work too hard in school, they don't kill themselves to find a job or establish a business.

This sounds very harsh and I'll bet that a lot of people would consider these findings unfair and demeaning. But I must say that I have heard so many stories about a lack of initiative even among the highly educated that I'm not entirely surprised by Krémer's findings. 

Sort by:   newest | oldest | most voted
Jano
Guest
Now this is more like it. No matter what examples one might cite from other European states, I think in a 4-years parliamentary cycle system, no positions filled in by the parliament should have tenure length longer than six years. I don’t even think this needs any explanation. Fidesz will pay the price for this one day (but this day might not come for a while). “The new draft states that “Hungary is endeavoring to provide social security to all its citizens.” As for pensions for citizens, the current constitution talks about “the right to provisions in old age” while the new one states that “Hungary contributes to the provision of livelihood in old age.” That explains an item in the new constitution: “adult children are obliged to provide for parents in need.” I don’t think this is necessarily bad. It is a shift towards self-provision which I welcome much, a lot depend on the details which will be laid out outside the constitution. The sentences in the current constitution is an impossible promise (i.e. a lie). It’s another question that this was not exactly the Fidesz point of view in opposition… About the extra votes for mothers, it’s so… Read more »
Kirsten
Guest

I also think Hungary would not have been admitted but I do not know why the EU should act if people in Hungary are not protesting loudly. It could be suspected that this constitution reflects the wishes of the “majority”. The “minority” should make use of the Charter of Fundamental Rights if this new constitution is violating basic rights. (But this Fidesz regime will not last long anyway. I expect an implosion when this mess gets too big.)

Gábor
Guest
Éva, actually the extra vote in the form it was included into the draft constitution is not a vote on behalf of children, instead a classic “plurális választójog”, like the one Gyula Andrássy Jr. proposed a century ago. It is not a right of the children (as there would be only one, irrespective of the number of children) but the mother, the existence of underage children is only the criterion. It is a scandalous breach of Hungary’s international obligations (it contradicts to the equality of suffrage as even the draft provision acknowledges)and if it would be realized Hungay would have to leave the UN, the Council of Europe because it would violate basic civil rights. For example Art 25. of the International Covenant of Civil and Political rights (to which Hungary is a party since 1974!) explicitly stipulates: Every citizen shall have the right and the opportunity, without any of the distinctions mentioned in article 2 and without unreasonable restrictions: 1. To take part in the conduct of public affairs, directly or through freely chosen representatives; 2. To vote and to be elected at genuine periodic elections which shall be by universal and equal suffrage and shall be held by… Read more »
Eva S. Balogh
Guest
Gábor: “actually the extra vote in the form it was included into the draft constitution is not a vote on behalf of children, instead a classic “plurális választójog”, like the one Gyula Andrássy Jr. proposed a century ago.” Sure, but that is the justification. Nowadays they can’t come out with “we will give an extra vote for those with college degrees.” But of course you’re right. If they keep this nonsense in the constitution, Hungary will be kicked out from the UN and the Council of Europe. Some people think that the inclusion of this nonsense is just a ploy: to take attention away from other more important issues. In any case, I don’t know whether you saw a comment on this question by the stupidest “political scientist” not just in Hungary but I bet in the whole wide world. His name is Zoltán Kiszelly who happened to say the following when asked on the subject: “Persze el lehet gondolkodni az inaktívak szavazati jogának – cenzus alapú – korlátozásán, de az Európai Unióban – most még – ez egy kevéssé ortodox felvetésnek számítana.” In English: “One could think of the restriction of the voting rights of inactive citizens on the… Read more »
Kirsten
Guest

Éva: “What do you think he wanted to say?”
That he made a valuable contribution to European political thought. I know this is no reassurance but Vaclav Klaus, the Czech president, could have made a similarly valuable contribution.

Paul
Guest

Off topic, I know, but I couldn’t let this pass without recording it.
We were watching film of the awful destruction in Japan tonight, when my wife (perfectly seriously) commented that this was obviously why the Jews were buying up Hungary, as Hungary had no coast and was therefore safe.
That’s what we’re up against in this ‘debate’.

Sandor
Guest
Paul, if your time and finances permit, and if you want to save your marriage, you must take your wife to an extended trip around at least in Europe. Include Israel too. This parochial thinking is the eventual undoing of a marriage, as easily as it is the undoing of a country as we witness. Besides, I don’t expect that the exclusion of Hungary from international bodies would bother the Fidesz at all. In fact those institutions would be in a snit, because they would loose the ability to influence events in Hungary. At the same time, Fidesz would spin the news to the home population as fighting the war of independence against the hateful foreigners. The new constitution as conceived by Fidesz will be an enormous flop, very soon. They will enact it, but the way I understand it, it is just as unworkable as all their extemporanious legislations were so far. Although the effects will perkolate through the system much slower, but this government will fail much sooner than that and what will follow, whatever formation, or even an emergency “war cabinet,” will be forced to start from square one by renouncing and repealing the entire Fidesz legislative… Read more »
LiberalFi
Guest

Hungary is the new Iran of Europe.
Gene Sharp must be sad.
It was always his concern that the nation would be hijacked after the revolution.
Hungary’s hidden goal is to obtain a nuclear bomb.

Member

Hungary is going to be expelled from the UN over this constitution? Don’t make me laugh. It will probably get a place on all the Human Rights bodies up there beside Col Gadaffi instead….

Member

“We were watching film of the awful destruction in Japan tonight, when my wife (perfectly seriously) commented that this was obviously why the Jews were buying up Hungary, as Hungary had no coast and was therefore safe.”
I actually think that anti-semitism is a secular version of superstition. Life is complex, difficult to understand and even more difficult to control or influence. It is easier to think of the world as being to the grip of a vast all powerful nameless conspiracy than to think that sh*t happens.

Member

David: “anti-semitism is a secular version of superstition.” I never looked at it that way, but i think if it needs to be summed up, you nailed it. I would also add homophobia and such.

Eva S. Balogh
Guest

Jano quoting me: “”The new draft states that “Hungary is endeavoring to provide social security to all its citizens.” As for pensions for citizens, the current constitution talks about “the right to provisions in old age” while the new one states that “Hungary contributes to the provision of livelihood in old age.” That explains an item in the new constitution: “adult children are obliged to provide for parents in need.” I don’t think this is necessarily bad. It is a shift towards self-provision”
Moreover, I think that the new wording is more realistic. It is very unlikely that any government can provide pensions that are enough for sustenance of retired people for, let’s say, thirty years. That’s why the government’s nationalization of the private pension funds was so ill-advised.

Gábor
Guest

Éva: “. Some people think that the inclusion of this nonsense is just a ploy: to take attention away from other more important issues.”
I don’t care whether it is a ploy or not. Anyone, who contemplates the introduction of plural suffrage is definitely not a democrat and it would be high time to wake up for Fidesz’s allies in Europe with whom they share their bed. It is at least as scandalous as the media law was, and even more direct attack on freedom and liberty.
Furthermore, if you consider their action and the draft constitution it is still the worst of the 1930s, with a pronatalist organic nationalism that seeks the rejuvenation and the rebirth of the nation and whose primary aim is the survival of this organism, the nation, irrespective of the price individuals have to pay. Individuals and their liberty can be subordinated to this supreme destiny, equality abolished, people and groups posing danger excluded, privae property appropriated. (It is instructive to read some of the Calvinist theologians on social issues from this period…) We are in a serious trouble…

Johnny Boy
Guest

“this government will fail much sooner than that and what will follow, whatever formation, or even an emergency “war cabinet,” will be forced to start from square one”
Dream on.

Jano
Guest

“That’s why the government’s nationalization of the private pension funds was so ill-advised.”
I totally agree. I don’t believe that the private funds made a big profit for their clients, but the principle of not counting on uncle Sam to take care of you. I’d love to embrace the traditionally left wing philosophy Fidesz had in opposition but it’s just not realistic at all. That is why it’s so important in my opinion that the state require participation from the helped in exchange for the help. To get that little money we have to the right place.

Odin's lost eye
Guest

I have been waiting for this more of the details of this draft of the constitution to appear.
After the debacle of the ‘Media Law’ the main part of the draft will be being looked at in Brussels with folk who have jaundiced eyes. After the ‘Media Law’ which is a little ‘can of worms’, every law that the present Hungarian Government drafts or enacts will be subject to such scrutiny.
The folk in Brussels now know the intention of the current government, its probable final objectives and the character of the ‘rat bags’ which make it up.
They will be first looking at it for breaches of the European Charter of Human Rights both in reality and in spirit. (One should remember that the European Court is the ultimate defender of such rights.)
Secondly it will look at all Hungarian legislation from the point of view of All the EU treaties, directives etc. for both breaches in substance and in spirit.

Member

“A new procedure was created, mainly available for the governing majority. With this new power the parliament can ask for an opinion from the Court before it passes a law. However, constitutional remedies after the law has been passed will be as limited as they are now, and access to the means of starting such a procedure will be diminished.
….
Access to the Constitutional Court, which has been a constitutional right for all citizens until now, will be severely limited. So far, more than 40,000 people have made legal claims against the decision to use their private pension savings to reduce the public deficit and the Court’s verdict is probably the most keenly awaited decision in Hungarian judicial history.
Lawyers representing those people who legally objected to the nationalisation are threatening to dump the tens of thousands of individual claims onto the European Court of Human Rights if it turns out that the Hungarian legal system cannot offer a judicial review of the decision.”
http://www.euractiv.com/en/future-eu/reflecting-hungarys-new-constitution-analysis-503078

An
Guest

Eva, very interesting post. I am sure there is something to it… though I would also look into the availability of jobs for unskilled workers in these countries. Despite some flagship foreign plants, like Audi, Hungary is not a manufacturing stronghold. Also, the service sector may also be less developed – meaning fewer job opportunities for people with less education (I’m thinking of McDonald’s type of jobs).

Ron
Guest

I believe that the lack of initiative is causes by
-education (focussing only what you do not know, and not what you do know),
-lack of service (Hungarians do not consider to provide a service as a high ideal, For example the non-laughing waiters in restaurants)
-Hungarian managers are more focused on their position than to improve service, via education, guidance of their employees.
-Companies are not willing to pay for training as they pay a special training tax (X % of salary costs), but they can deduct education expenses from this tax, exception is of course any language education.
But I believe the most important reason is the mentality that employees job hops every 1.5 to 2 year for some extra salary. So Companies are not willing to finance the education of such employees.

Member

Very interesting Eva. I would love to have some survey statistics to back-up those claims although. It could be very simple to pick 1000 unemployed people and send them a survey that they can fill out anonymous. My suspicion is that since there are more Catholics in Hungary then Protestants (or any other religions) they would be over-represented among the unemployed, but that could be adjusted. Also larger family sizes for Catholics are more common then for Protestants (that is also true for gypsies), and sometimes the benefits received could outweigh the money that could be earned with steady employment. (Maybe the last sentence more applies to Western societies.)

Ron
Guest

Or it seems that you can an EU subsidy for this.
http://www.bbj.hu/business/it-services-won-huf-83-mln-eu-grant-for-language-training_56551
Mind you this is only for large companies, for small, medium or entrepreneurs it is most likely impossible to get such subsidy.
They have to finance this themselves.

Member

I guess we should stop being dumb and lazy.
Ahh. I should get a PhD in Sociology for this.

Ron
Guest

Mutt Damon: I guess we should stop being dumb and lazy.
The politicians should stop being dumb, lazy and stop fighting each other.
Tax deductibility for companies and/or employees should be introduced. People who want to improve their situation in general have/do not earn too much money.

Paul
Guest
This has a ring of truth to it to me. One thing that drives me mad when we are living in Hungary is the lack of initiative displayed by the average Hungarian (actually, make that nearly ALL Hungarians). We live in a flat in a block of 12, and, after six years, things are starting to need repairing and maintaining. Also there is the year round problem of looking after the ‘garden’ (actually a cross between a car park and a field). Last year we were due to spend over 4 months in Hungary, so I was looking forward to the chance to get some of these things sorted out. Usually we are not there for long enough at any particular time to get involved with this side of things. Things didn’t start too badly; we agreed to get rid of our existing maintenance company (who did almost nothing except mow the grass occasionally). However, we somehow ended up with a company that doesn’t even get the grass mowed! To date, despite much pushing from us, no one else has complained about this, or can be bothered to do anything about it. Last summer’s wet weather left us standing in… Read more »
Jo Peattie
Guest

I agree with Ron. My husband has to deal with the consequences of the Hungarian Education System- an inflexible workforce who look for reasons to fail. He is what would be described as negative in a lot of respects- he prefers to call it realistic. His negativity pales into insignificance when compared with his Hungarian colleagues…

late night
Guest
Even while we “resist Brussels”(and cut each others throats to grab EU grant money) we talk here about a main EU plan area. Quote: The European Union effort to reach an employment rate of 75% for women and men aged 20-64 years by 2020, in the framework of the strategy ”Europe 2020”, may not be feasible, Cypriot economist and winner of the Nobel Prize for Economics, Christopher Pissarides, said on Thursday. Speaking to the press, after having participated in a conference organised in Brussels by the European Commissioner on Employment Laszlo Andor, headed ”The future of European labour markets,” Pissarides said that there are two reasons why the target of 75% might not be achieved. Unquote. Is there Hungarian capital eager to invest in jobs, in training for the Hungarian unemployed, coming mainly from Roma families? Now, when middle class/big business is FIDESZ and/or Jobbik? Fervent FIDESZ supporters wouldn’t help Roma. It will be Brussels(or others(also worth to be resisted) doing it, and FIDESZ/JOBBIK sabotaging it. 2011 12:06:01 PM Paul: As you said that was in Romania, especially Wallachia and Moldva. Also, I’m sorry about your wife but please don’t project it to the rest of the Hungarians. (It would… Read more »
Ron
Guest

Please find the first draft of the Constitution in English. Please note that according to some groups the translation contain major mistakes and translation mistakes.
http://www.euractiv.com/sites/all/euractiv/files/CONSTITUTION_in_English__DRAFT.pdf
And the latest news on the hearing on the Hungarian Constitution in the EU.
http://www.euractiv.com/en/future-eu/new-hungarian-constitution-slithers-eu-hearing-news-503641
Why, for the second time, are the Hungarian socialist not at the hearing. This is where they can make the difference.

Ron
Guest

After glancing through the constitution i come to the conclusion that I cannot judge this without definitions, such as:
Super majority, what is this? 51%, 66%, 75%, 80%, 99.9%
Emergency what type, how severe, can it be local, country , county.
is this constitution no violating the tax treaties, in order words an Hungarian abroad needs to pay two times taxes.
Questions, questions, questions.

Pisti
Guest

exactly… questions questions questions. Still waiting for the answers..
However, so far I don’t see a reason to be so doomsday-ish. An extra vote on behalf of children is preposterous, but as a commenter said above, everything will be subject to diligent European review and criticism. There is a system of checks and balances functioning in the EU, and just like the media law had to be amended, if the EU constitutional court has any serious grievances, those will be amended as well.
And since this is a left-leaning blog, the positive side of the c. changes I didn’t expect to see being discussed here:
– reduces # of parliament members from 365 –> 200
– hungarians abroad can vote if linked to hungarian address
– CB president’s term 9 –> 6 yrs (as opposed 6 –> 9 stated in the original post)
There are good and bad initiatives in the new constitution, so let’s try to be fair in our analysis…

Ron
Guest

Pisti: The point you mentioned in your post are all more or less mentioned, notably on March 26, 13, 12, 11 and 10 and during some other posts in March and April.
I agree to find something back is difficult and not user friendly, and perhaps something will be done about this in future.
And by the way I do not think that this blog is left-leaning, however, nowadays any criticism is considered leftist. So be it.

wpDiscuz