Severe labor shortage combined with anti-immigration propaganda

Two days ago, seemingly out of the blue, Mihály Varga, minister of the economy, got in touch with MTI, Hungary’s official telegraphic agency, to make the grand announcement that “the government is taking steps to remedy the growing labor shortage that is becoming an impediment to economic growth.” As it turned out, the minister’s move was prompted by a proposal submitted by the National Association of Employers and Manufacturers (Munkaadók és Gyáriparosok Országos Szövetsége/MGYOSZ) to address the acute shortage of qualified workers in many fields.

Varga stated that the government agrees with many of the recommendations, which include the importation of guest workers from so-called third countries, i.e. outside the European Union. In order to facilitate this recommendation, the government promised to reduce the tax burden on companies that bring in foreign employees. This is the first time the Orbán government has officially admitted that the lack of qualified workers is a serious problem in Hungary.

The problem, of course, is not new. Already a couple of years ago Stefan Körmendi, managing director of Europakraft GmbH, bitterly complained that the Hungarian government had deceived him and his company when it sang the praises of the “well-qualified Hungarian labor force.” His company needed skilled welders, pipe fitters, and disk roller specialists. There were plenty of applicants, but when they had to demonstrate their skills, most of them were unable to perform even the most basic tasks. Sixty percent of the 600 applicants tested couldn’t even weld, and all of these people had a piece of paper testifying that they had successfully been trained as welders. The whole sad story can be read in my post from 2014.

Since then the situation has only gotten worse. At the end of June Népszabadság reported that some foreign companies are so desperate that they are importing employees from their other factories to work in their Hungarian division for shorter or longer stints. The article highlighted the case of a factory that makes tops for luxury convertibles. The company’s Hungarian division, situated in Szügy, a small village in Nógrád County, was in such trouble that it had to bring in four women and four men from its Mexican division in Toluca for three months. Even with the added expense of transportation from Mexico and perhaps bonus pay, this solution was apparently still worth it. Guest workers also came from the company’s Russian and Serbian divisions. These foreign employees were necessary because the quality of the work done by the locals was not what management expected. The number of rejects was far too high. Moreover, this factory ran three shifts, and it was difficult to fill all the shifts with Hungarians. They weren’t interested in working outside the usual daytime hours.

Bors, a Hungarian tabloid, dispatched a reporter to Szügy, where he learned more details of the lives of Mexican guest workers while in Hungary. They were placed in a stately mansion that serves as a hotel; they were taken to Budapest and other cities in the country on sightseeing trips; the company even made sure that they could watch Copa America football matches on television. Apparently, they didn’t like the food, but otherwise I’m sure this Hungarian trip was quite an adventure for them. After the Mexicans left, a new batch of people came from Tatarstan, Russia. Clearly, the situation is desperate, and I’m sure that the management of this company is just as frustrated as Körmendi was back in 2014.

MGYOSZ’s suggestions “for the handling of the critical labor shortage in Hungary” started with the main reasons for this shortage: low birthrate; emigration, especially of more highly qualified workers and university graduates; the fact that almost half of those seeking employment are unskilled; and a workforce whose quality is on the decline. Something must be done quickly because otherwise the economic growth of the last couple of years will come to a screeching halt.

To solve this crisis, first and foremost the government should assist in attracting foreign workers. For example, one million Ukrainians are working in Poland at the moment. In Hungary’s case, that would mean the importation of about 250,000 foreign employees. But Hungary is not an attractive place for guest workers because of low wages, high taxes, the lack of housing, and the low level of social services. MGYOSZ asked the government to lessen the tax burden on employees so they could raise wages. And naturally, to put more effort into the proper training of workers. The long-term goals include a better educational system that emphasizes the 4Ks: kreativitás, kommunikáció, kooperáció, and kritikai gondolkodás. As we know, Viktor Orbán’s ideas on education stand in sharp contrast to these guiding principles.

Turkish guest workers arriving at the Düsseldorf Airport on November 27, 1961 / Source: en.qantara.de

Turkish guest workers arriving at the Düsseldorf Airport on November 27, 1961  Source: en.qantara.de

Mihály Varga, I’m afraid, was a bit too hasty when he reacted positively to MGYOSZ’s suggestions. The Orbán government has consistently and fiercely opposed any kind of immigration and keeps repeating that more babies will solve all the problems. Mind you, the demographic statistics show no great positive changes on that score. Viktor Orbán must have been furious, and I wonder what “Misi” got from the boss.

Fidesz published a statement saying that the Hungarian government provides work opportunities for Hungarians, not for immigrants. Only the political left and Brussels want to flood Europe and the labor market with immigrants. The Prime Minister’s office also spoke out again against immigration. According to its spokesman, statistics prove that immigration actually exacerbates the problems of the labor market. MSZP’s spokesman, Nándor Gúr, also objected to the scheme because the presence of foreign workers would lower wages in general. The government mouthpiece, Magyar Idők, tried to provide cover for Varga by claiming that MGYOSZ actually talked about guest workers from “the neighboring countries” and not from “third countries.”

Some commentators, like Kinga Facsinay of Magyar Nemzet, pointed out that after a year and a half of intense anti-immigration propaganda, Varga’s enthusiastic embrace of the importation of a large number of guest workers is a strange turn of events. Actually, this is just another example of the confusion within the government that has been endemic ever Fidesz won the election in 2010.

But, yes, the propaganda was, and remains, both intense and expensive. On the anti-migrant campaign the government spent billions: 960 million forints for a “national consultation” and 1.2 billion for the two billboard campaigns. The “Message to Brussels” campaign wasn’t cheap either; it cost 1 billion forints. And the October 2 referendum on quotas will cost 4.5 billion. Instead of wasting all this money on propaganda, the government could have used it to improve the education of future Hungarian workers.

More than 25 years have gone by since the arrival of democracy in Hungary, and yet over 40% of those who are actively seeking employment today have no qualifications for any job. This is a devastating indictment of the Hungarian educational system. It also underscores the failure of successive governments to create an economic environment that would have kept emigration within bounds. Since both have been neglected, I see no short-term internal fix for the Hungarian labor shortage. And this will in turn discourage foreign companies from investing in the country.

If the Hungarian government changed course and welcomed guest workers, this might help a bit. But under the present circumstances few people, especially highly skilled workers, would be enticed to emigrate to Hungary in the hope of a better life.

July 8, 2016
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Roderick S. Beck
Guest

Low quality and shortage of skilled works is obvious. No skills, no interest in new ideas or new ways of doing things. My success in real estate reflects not only the great work that we have done, but also the sheer incompetence of the competition. When I renovate a flat, we lay ten centimeters of concrete and glue the parquet to it. Not for the Hungarians. They keep the original industrial ash in place and lay the parquet on top. In 15 years the parquet sags. My parquet will last indefinitely because it firmly supported. Hungarians keep the original windows even they bleed heat. I install triple glazed windows. In the few cases where Hungarian install AC, they use standard technology. I use inverter systems that consume 30% electricity. The Hungarians don’t use interior designers. I use the best interior designer in the country.

Member

What is the point here? Self-advertisement? Besides Orban trolls is Hungarian Spectrum now to be used for commercial self-advertisement? Look at where “Roderick S. Beck” links to: http://www.longtermbudapestrentals.com/

Escort girls next?

Roderick Beck
Guest

The point is that Hungary’s failings reflect its culture. First of all, Hungary was never a great country or culture like Germany, France, UK or the US. You are just taught propaganda at school. The one progressive segment of Hungarian society and they are 95% gone. If an American with no background in real estate can come into the country and clean up, then it tells you the gravity of Hungarian cultural problems. I have not encountered virtually new ideas here in six years. I have encountered a lot of laziness, close mindedness, etc.

Member

The problems of Hungary are rooted from Communism and greatly increased by the Globalists “buying up Hungary”. And Gyurcsany was the “worst leader ever”. What “great cultures” are you talking about? France, Germany, UK, USSR, USA invading and robbing others for centuries? We Hungarians are as smart as you are. I left Hungary at 22 due to your Communist oppression. I worked in the USA for NASA, Goodyear and Ford. I invested in real estate and I retired at 39 years old! As a foreigner I have encountered “a lot of laziness, close mindedness, etc.” Dumb people, the losers are everywhere, even in your old country.

Roderick S. Beck
Guest

Low quality and shortage of skilled works is obvious. No skills, no interest in new ideas or new ways of doing things. My success in real estate reflects not only the great work that we have done, but also the sheer incompetence of the competition. When I renovate a flat, we lay ten centimeters of concrete and glue the parquet to it. Not for the Hungarians. They keep the original industrial ash in place and lay the parquet on top. In 15 years the parquet sags. My parquet will last indefinitely because it firmly supported. Hungarians keep the original windows even they bleed heat. I install triple glazed windows. In the few cases where Hungarian install AC, they use standard technology. I use inverter systems that consume 30% electricity. The Hungarians don’t use interior designers. I use the best interior designer in the country.

webber
Guest

Message? You’re so great, Hungarians (all of them) are so stupid?

Wondercat
Guest

Unwelcome anecdotes, but not necessarily untrue.

Guest

Webber, it’s not a question of stupidity – rather of means and education!

When I had my house renovated I often had to tell the archtitect, the builder and the craftsmen:

No, I don’t want that cheaper solution – I want the more expensive one (like large Velux windows), because it’s safer ( a modern electricity cut off switch in case of failure), more comfortable (room for a dishwasher and a dryer, not just a washing machine), because it’s better for the environment (a more efficient heating system and better insulation) and because it saves money in the long term!

And still, when I wasn’t there they made compromises which sometimes I wish undone …

webber
Guest

Wolfi – One of my grandfathers used to say “You get what you pay for.” The other, who was from a poorer background, once responded: “Sometimes.”
My knee-jerk reaction when presented with options for hardware, furniture, or construction in Hungary (and only in Hungary) is to go for the more expensive.

Oddly, I find this sometimes brings some respect – though you’ve got to be very careful in private deals, as swindlers abound.

I don’t do it in the US. There I think middle-priced options are often best (if the warranty is about the same), though one of my grandfathers would have disagreed with that.

Guest

Webber, I can’t compare the situation in Hungary to the other “Balkan states” (I know that geographically Hungary is a part of Central Europe – but in people’s minds …) but from the start when I came here I learned not to go for the “standard” (i e cheap) solution to any problem but to look first.

Sometimes the cheap solution was (and still is!) ok. Often it meant repairing something which we would have thrown away in Germany – and I still find this ok, we have several craftsmen (machines, wood, cars even) who do a very good work and I appreciate that.

But sometimes you just have to “go for it” and choose the expensive way!

Of course I’ve been disappointed sometimes by the quality of work, but after 15 years here in the village I know whom to trust – and having a Hungarian wife now helps of course. 🙂

But even in the first years I wasn’t cheated so often – a little “Menschenkenntnis” will take you a long way!

Roderick Beck
Guest

Hungary does not have a culture of quality anymore. It disappeared along with the Jews. What is striking is that things that I consider commonsense like energy efficiency never even occur to my Hungarian competitors. I attribute not to inherent stupidity but to a weak culture. I don’t care whether it makes people like you bitter because success speaks for itself. If the Hungarians would eat some humble pie, stop exaggerating their accomplishments and get down to hard, steady work, then they could prosper too.

webber
Guest

Who is bitter?

Member

Don’t worry, the Jews are back. Youtube search: “We are buying up Hungary, Poland.”

The majority of the
Guest

The majority of the immigrants would be third worlder muslim population without education.

Guest

At our latest idiotic troll:

Just as the majority of Hungary’s population are Christians without education – thanks to Fidesz?

If there were only one person among the immigrants like Steve Jobs’s father – that would be enough for Hungary …

Istvan
Guest

Well Wolfi that is a pretty complex comparison, because Steve Jobs biological father never raised him. He was put up for adoption by his father Abdul Fattah Jandali and his mother a German-Swiss Catholic Joanne Carol Schieble. Schieble’s family refused to allow her to marry a non-Catholic. The stipulation in the adoption was that the baby be adopted by a Catholic family.

Of his biological parents, Jandali and Schieble, Jobs was dismissive: “They were my sperm and egg bank. That’s not harsh, it’s just the way it was, a sperm bank thing, nothing more.”

Guest

My reply was somehow lost, Istvan – now I’ll make it short:

Was Jobs’ success defined by his upbringing/education (a working family btw – and not Catholic as his mother’s father had wanted …) or his genes?

Anyway, a country like Hungary that has seen so many “mixed marriages” is a good example of what really happens!

Istvan
Guest

The nurture vs nature debate has been around a long time. Most of the research I have seen argues that outcomes for live long intelligence is around 70% determined by nurture or family inputs and only around 30% determined by inherited genetics.

Through studies of identical twins separated at birth, researchers have come to believe about one-third of their creative thinking abilities come from genetics and two-thirds come from learning. Some research suggests that between 37 and 42 percent of the explained variance can be attributed to genetic factors. The learning primarily comes in the form of human capital transfers of entrepreneurial skills through parental role modeling. Clearly Steve Jobbs believed it was his adoptive family that provided him with his entrepreneurial skills.

That raises the question as to where Orban gained his skills in deception and cunning, his family or his gene pool?

Observer
Guest

“..where Orban gained his skills in deception and cunning, his family or his gene pool? ”

Both, plus Hungarian society at large.

Roderick Beck
Guest

Baloney. You could give immigrants tax breaks either long term or permanent. There are plenty of ways of bringing talented people into the country. And I would be careful about “without education”. Have Polish plumbers attended Oxford?

Guest

Re: ‘kritikai gondolkodas’

Another sad sad piece highlighting the lack of that kind of thinking when it comes to preparing the country for the great challenges of the 21st and beyond. It is quite evident the stewards of the country do not have the skills to take the measure of events and apply them to the country’s advantage. The apparent impassivity in the attitude to educational reform is remarkable and troubling. I guess nobody in power ‘gets it’.

petofi
Guest

I’m not sure what kind of fantasy land most commenters live in…but Hungarico politicians of today–with the rarest of exceptions–don’t give a fig about ‘the welfare of the country’. Their focus is on self-aggrandizement: and that characteristic has been a central norm and belief of the mainstream. No Hungarian is surprised…they just wish they were in the position of Orban/Rogan/Lazar and the rest, to be able to do the same-

Member

Don’t forget to include Mr. “Elkurtuk” Gyurcsany.

Guest

O/T Who would want to to Hungary where your freedom to demonstrate results in being called a terrorist outside the ‘Ministry of Justice’?

When you are 83 years old?

And carry a poster ‘Rogan Antall Steals’ or ‘Rogan Anti-Lop’!

And you tell M8tolscy that you wouldn’t mind being his cousin!

A one woman crusader who promised her dying son that she would protest everyday to the bank when his mortgage went from 6m forints then 13m then 19m forints.

Even when Orban promised if you worked hard you wouldn’t be pushed onto the street.

A brave sassy woman!

(I know there are hundreds of these stories but this is sad.)

Member

Brave, but not smart. They should have read the loan documents and not sign them unless there is an interest cap.

Wondercat
Guest

Igénytelenség. I know this as “Bescheidenheit”, and had imagined that to be easily satisfied was a good thing. — But, yes: “It’ll do” is another reading. Thank you, Webber, Wolfi, and Prof Balogh.

Guest
1. What can one say to all this idiocy? Basically, it is a quintessential case of sow the wind and reap the whirlwind, avagy ki mint veti ágyát, úgy alussza álmát. 2. One thing is for sure: anybody investing in Hungary in the present circumstances has got to have his/her head read. 3. A comparison with the quality of human resources in Israel is instructive. The country has been under siege for the past seventy years, with huge defense costs, economically held back by large Arab, ultraorthodox Jewish and black African Jewish sectors, and plagued by horrific levels of corruption and vicious internicine conflicts. But there is strong rule of law and vibrant investigative media, and the corrupt keep getting caught and punished no matter how high their social status. The country’s finances are sound, its credit rating good, and living standards rose from utter impoverishment in 1948 to levels comparable to countries in Western Europe, attainable today by anyone willing to put their shoulders to the wheel. For all intents and purposes the historically lagging Arab Jewish sector has well and truly caught up socially, politically and economically with the European Jewish sector. A very large proportion of the… Read more »
Guest

Edit:

Point 3, line 3 should have read ” . . . by large Arab, ultraorthodox Jewish and of recent black African Jewish sectors . . . “

Member

Obviously you forgot to mention the US$3.9 billion yearly aid from the US and unknown $ billions mounts from other sources, which makes it much easier for Israel to flourish.

Guest
@Parduc Today 7:20 pm I didn’t mention it, because that would have needed putting it into context, which would have taken my post even further into OT territory. But seeing that you have brought it up, here we go. Originally the aid package you are referring to was offered by the US as part of the Camp David accords between the US, Israel and Egypt in 1978, with the purpose of keeping the peace between Israel and Egypt and keeping the Soviets at bay in the Middle East. This latter was a vital consideration, particularly in light of an almost-victory by a Soviet-backed Egypt in the 1973 Yom Kippur War which Israel could well have lost without quick American resupply. The aid package was designed as purely military aid for both Israel and Egypt in order to help fund their military purchases in the United States, in effect providing a federal subsidy to the US military-industrial complex. At that time the quantum of the aid was to be around US$2 billion a year for Israel and a smaller amount for Egypt. This US military aid was of course most welcome by both Israel and Egypt, which together with Turkey became… Read more »
Stephen Varcoe
Guest

The government doesn’t waste any money on propaganda. The money is spent abut 30:70 on creative and media cost. The ad agency kicks back a large part of the creative fee to Rogán and about 75% of the media budget is spent with media owners that are friends of the govt or alternatively state owned.

Observer
Guest

Spot on.
The pattern was established already in 2011-12 when the state owned media was severely centralized and about 50% of the staff was fired.
Nevertheless, the budget of the state media was doubled from 43-44 billion Forints, with an additional injection of 47 billion in 2015 to cover the debt accumulated by MTVA in three years.
Notably most of the contents are being outsourced (i.e. money was siphoned) and turned out to be of inferior quality leading to all times low ratings.

The corruption rages on.

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