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.
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.