Tag Archives: demographics

Shrinking population, shrinking labor force, sluggish economy

Given the Hungarian government’s fierce opposition to accepting any refugees, I decided to take a look at the latest Hungarian population statistics.

Since Viktor Orbán became prime minister in 2010, the population of Hungary has shrunk from 10,014,324 to 9,830,485 (as of 2016). It has lost 183,939 persons, roughly the population of the second largest Hungarian city, Debrecen. If we break these figures down by age group, the situation is even more dire. Today there are fewer children between the ages of 1 and 14 (-62,408) and fewer adults between the ages of 15 and 64 (-264,527) than in 2010. What is more alarming is that the number of those over the age of 65 has grown substantially. To be precise, by 164,517, which is about the population of Szeged, Hungary’s third largest city.

Ever since the second half of the 1980s, the natural decrease of the population was around -3.5 per 1,000 annually. Last year was one of the worst, at -4.1. The Demographic Research Institute of the Central Statistical Office predicts that if the trend of the last 30 years continues, Hungary’s population will be under 8 million by 2060.

Current population statistics most likely overestimate the number of inhabitants residing in the country since many of those who moved abroad in the last few years never bothered to announce their departure to the authorities. Their number might be as high as 600,000, according to figures provided by Eurostat and assorted national statistical offices. Under these circumstances, a labor shortage in practically every sector of the economy is unavoidable.

Last summer I wrote two posts about the severe labor shortage in Hungary caused by the low birthrate and the massive exodus of Hungarians. I expressed my belief that without an infusion of foreign labor the situation cannot be remedied. A few days later the National Association of Employers and Manufacturers (MGYOSZ) suggested that Hungary would immediately need about 250,000 foreign workers, who should be enticed to come to Hungary from abroad. Mihály Varga, minister of national economy, agreed with MGYOSZ’s estimate of the situation, but in no time Fidesz published a statement saying that the Hungarian government provides work opportunities for Hungarians, not for immigrants. Both MGYOSZ and Varga got the message, but it turned out that the government “secretly” began the importation of foreign workers from so-called third countries, i.e., countries lying outside the European Union.

Hungary can hope for immigration only from countries with lower living standards than its own. Thus the government gave Samsung Magyarország, located in Jászfényszaru, a town of 5,000 in the northern portion of the Great Plain region of Central Hungary, permission to recruit workers from war-torn Ukraine. Of course, for Ukrainian speakers Poland or the Czech Republic might be more attractive given the easier linguistic communication there, so Samsung had to make its job offer especially enticing. By November of last year Samsung employed about 150 Ukrainians, and apparently their numbers are growing. In addition to their monthly pay of about 125,000 forints, they receive housing, some food, and travel expenses to return home once a month. About 100 of them live in nearby Jászberény in apartment houses; others are still in temporary housing on a camp site. The 125,000 forint salary isn’t much, but in comparison to what they would make in Ukraine it is considered to be quite good. Index interviewed a couple who are all set and ready to settle in Hungary. In a few years they will be able to save enough money to buy a house in one of the nearby villages. Another man with a Hungarian wife is learning Hungarian in order to become a Hungarian citizen.

The Ukrainians working on the Samsung assembly line were given on-the-job training. The same is most likely true of the six Indian guest workers who milk cows on a dairy farm in Sarud, close to Eger. Locals were either not interested in the job or, once hired, didn’t work out. The owner of the dairy farm heard about Indian workers at another farm who were highly praised. So he decided to follow suit. The first six have arrived. They are so hard working and reliable that the Hungarian dairy farmer has nothing but praise for them.

Sándor Csányi, head of Hungary’s largest bank, established a slaughterhouse in Mohács. He had a terrible time finding butchers because experienced Hungarian butchers had left for Germany a long time ago. Supermarkets also have a very hard time finding workers, and their management teams have been thinking of ways to fill these positions–one strategy is to retrain public workers. The few migrants who received permission to stay in Hungary quickly gain employment–mind you, mostly by foreign-owned firms.

The government is now trying to remedy the serious labor shortage by allowing retirees to accept tax-free part-time jobs. It was only a few years ago that the Orbán government insisted on a mandatory retirement age of 65. Now the government is trying to entice retirees to return to work.

Hungary, of course, is not alone in facing this problem. Germany’s labor shortage won’t easily be remedied with often unskilled migrants who don’t speak the language. But immigrants learn fast. With a well thought out plan, within a few years Germany might solve its labor shortfall. Great Britain, on the other hand, will be in trouble if Theresa May’s government succeeds in putting an end to or severely restricting immigration to the British Isles. For example, Brits show little interest in working in hotels and restaurants. In one chain, Pret a Manger, 65% of the employers are from countries outside the European Union. The hospitality industry would probably collapse without a steady flow of immigrants. Only recently Global Future, an employer-backed think tank, reported that the British economy needs an inward migration flow of 200,000 people a year “to avoid the catastrophic economic consequences” of Brexit. They warned that if the UK refuses to be flexible about labor inflow, the country could face decades of slow growth similar to that experienced by Japan. Just today The Guardian published an article that recounts the possible plight of Hall Hunter Partnership, a business that grows 10% of the UK’s strawberries, 19% of its raspberries, and 42% of its blueberries on thousands of acres. The company needs 3,000 pickers, who come from Bulgaria, Romania, and other East European countries. The opponents of EU membership talked about sovereignty and control, railed against the free movement of labor, but “what they didn’t mention is the way the British food supply chain has, over the past 30 years, become increasingly reliant on workers from elsewhere, both permanent residents and seasonal labor.” Around 20% of all employees in British agriculture come from abroad, mostly from Romania and Bulgaria, while 63% of the employees of members of the British Meat Processors Association come from outside the UK.

Indeed, the example of Japan might be a good illustration of what could happen to Great Britain if it closes its doors to immigrants vital to maintaining its economy. Japan’s birth rate has been dropping since the 1970s. “One percent shrinkage in population will slow Japan’s economic growth by about half a percentage point each year. So 0.5 percent of GDP is about 2.5 trillion yen ($2.95 billion) every year that’s potentially lost economic revenue,” according to an economic expert on Japan. He thinks that Japanese society will finally have to decide that they must embrace the idea of immigration. This is not going to be easy in insular, quasi-racist Japan.

The same holds true in Hungary, given Viktor Orbán’s insistence on “cultural purity.” It is impossible to maintain a robust economy with a shrinking workforce and an aging population. Something must be done.

May 21, 2017

Viktor Orbán, the “great supporter” of European common action

A couple of days ago we pondered the true meaning of the Kohl-Orbán joint communiqué, which emphasized a coordinated European response to the refugee crisis. What could have transpired during the hour Viktor Orbán spent with the ailing Helmut Kohl? What did the former chancellor tell the Hungarian prime minister to entice him to sign a document that emphasizes common action in the face of one of the greatest challenges the European Union has confronted in its existence? We now have the answer.

Today Viktor Orbán gave his customary, carefully choreographed Friday morning interview on Kossuth Rádió. About three-quarters of the conversation was devoted to Orbán’s views on the migration issue. His message was unequivocal. It matters not what he signed after his meeting with Kohl, he hasn’t budged an inch. He totally rejects a common European solution to the refugee problem–unless, of course, the rest of Europe accepts his solution. One could ask why he signed a document that goes against his deeply held beliefs. Because such a gesture at the moment was to his political advantage. For him it was only a scrap of paper without legal consequences.

Today’s interview began with a “little white lie.” Orbán claimed that “every time I visit the southern regions of Germany I visit Chancellor Kohl.” Sure thing, he just calls the Kohl residence announcing that he is somewhere nearby and the next thing we know he is sitting in Kohl’s living room.

He continued the interview by systematically misrepresenting the current German position on the refugee question. He claimed that although it is true that in the past there was “a significant difference between Germany and Hungary on the handling of the migrant crisis,” by now “the Germans have changed their position.” They recognized that Viktor Orbán was right all along, although “Europe doesn’t want to admit that.”

Viktor Orbán in the studio / MTI

Viktor Orbán in the studio / MTI

It was inevitable that the issue of compulsory quotas would surface in this particular Friday session. After all, the Orbán government is already hard at work preparing the ground for a referendum on the question of quotas. The Hungarian people are supposed to refuse, through a democratic process, to allow any refugees to be settled in Hungary. Orbán is adamant on the issue. His view is that if Angela Merkel “made a decision to accept migrants without any control, then she should take full responsibility for that decision.” Since other member countries, including Hungary, were not consulted, they are not obliged to take responsibility for the consequences of this action.

The reporter, who is of course carefully trained and never asks embarrassing questions, did venture to inquire whether Orbán doesn’t see a contradiction between the Kohl-Orbán communiqué’s reference to common action and Orbán’s emphasis on national sovereignty. The answer is worth translating verbatim.

No, because stronger cooperation means Schengen. My suggestion is that if a country is a member of the Schengen system and therefore enjoys its benefits, which means that its citizens can move freely within the borders, it must also accept the concomitant commitments, which include the defense of the Schengen borders. If a country refuses this obligation, the European Union should take away this country’s right to defend the borders. Well, actually, since we are talking about sovereign states, one cannot force them, but the EU should ask them to hand over the right of defense. If that country refuses to oblige, it should be expelled or its membership in the Schengen zone should be suspended.

I find it interesting that Orbán’s first thought was to use force against a truant state and that it was only a second later that he caught himself offering a solution that disregards the sanctity of sovereignty he so fiercely defends.

Relatively little time was spent on his Schengen 2.0 action plan, but the little there was is interesting. He gave the impression of such staunch German support for his plans that the interviewer summarized her understanding, saying that “there is then strong German support for your ten points.” Well, at that point Orbán had correct her and admit that “not quite, because Brussels in the meantime published its own proposals … [which are] absurd.” According to this “ridiculous idea,” Europe’s demographic situation is so grave that only immigration can solve the problem. This is a totally unacceptable idea according to Orbán, who finds it “unchristian and objectionable from the national point of view.”

The government has already prepared the ground for a forceful campaign for the totally superfluous referendum against compulsory refugee quotas. They dug up an old study the Gyurcsány government commissioned back in 2007 on the demographic problems facing Hungary. Magyar Idők, the government paper, dutifully printed a long article about the evil intentions of the socialist-liberal government. Even the headline is telling: “The left has been waiting for the migrants for the last ten years.”

Magyar Idők’s summary of the document shows it to be a well-reasoned analysis. The study maintains that, with globalization, migration is inevitable and Hungarians, especially highly qualified professionals such as doctors, will leave the country to accept better paid positions elsewhere. This exodus might be lessened by certain government policies, but selective immigration will undoubtedly be necessary to maintain the healthy demographic balance essential for a thriving economy. Natural reproduction cannot solve the demographic problems of the country, and therefore a selective immigration policy should be implemented. It is possible that by 2050 10% of the population might be of foreign origin, the study predicted.

Orbán is now using this study commissioned by the socialist-liberal government as a weapon against the opposition. The highly xenophobic population now can blame not only Brussels for its egregious refugee policies but also the Hungarian socialist and liberal politicians who wanted and most likely still want to flood the country with foreigners. “We must prevent this at all costs. We must stop not only Brussels but also the Hungarian allies of Brussels. We must stop the left because by now anybody can read what kinds of plans they were entertaining.”

This from the mouth of Viktor Orbán, who told us only a couple of days ago that he wants to have a common European solution to the refugee question.

April 22, 2016

How far is Hungary prepared to go to raise the country’s birthrate?

On January 7 only a few people, mostly bloggers who spend a lot of time on the Internet, especially on Facebook, noticed that the Budapest section of the Association of Young Christian Democrats (Ifjú Kereszténydemokraták Szövetsége / IKSZ) was planning to gather to discuss Hungary’s demographic woes and possible remedies, like extra levies on single adults over the age of 24 or barring women with fewer than three children from important positions in the public sphere. That would mean, for instance, that “underperforming” women in healthcare and education could not become department heads, principals, or full professors. As it turned out, the Young Christian Democrats were inspired by a newly published book, At the Edge of the Precipice, written by József Benda.

To me József Benda is something of a mystery. In an article on him that appeared in Magyar Nemzet he is described as a sociologist. In another article he is said to run a private, experimental school based on a teaching method called “humanistic cooperative teaching.” Apparently Benda started his school, the Humánus Alapítványi Általános Iskola, in Újpest in 1982. Elsewhere Benda is presented as a university professor at the Budapest Metropolitan University, the largest private university in Hungary with master’s programs in communication and media studies, management and leadership, tourism management, and graphic design. In the last few years Benda seems to have devoted his time and energy to the study of demography. He is trying to find answers to the dwindling Hungarian population.

József Benda is no stranger to KDNP (Christian Democratic People’s Party). In fact it was the party’s foundation, the Barankovics István Alapítvány, that supported his book’s publication, which approaches Hungary’s demographic problem from an entirely new angle. If I understand it correctly, in Benda’s opinion the reason today’s adults don’t want to have children is because in their childhood they missed a close and loving relationship with their mother due to the mother’s role as a wage earner. Well, I for one don’t buy Benda’s hypothesis, but if he had been satisfied with proposing a theoretical explanation for the low birth rate, I wouldn’t have given it a second thought. Unfortunately, he has scores of “suggestions” for how to remedy the situation. And the vehicle for his thoughts is the Christian Democratic Party.

The idea of a debate on Benda’s ideas organized by the Young Christian Democrats was quickly abandoned. As Népszabadság noted, they got scared by the vehemence of the negative reaction all around. As soon as the paper reported on the forthcoming debate, the chairman of IKSZ phoned. He denied that he himself had anything to do with the gathering and later announced that the group “supports the government, whose policy is to lower taxes” and therefore it doesn’t support any punitive tax on childless women.

Benda’s ideas are truly outlandish, as we will see a bit later, but the problem is that some of them have been circulating in Fidesz circles for a number of years. As early as 2006 Fidesz talked about an extra tax on childless people. In fact, during the campaign Orbán promised that if Fidesz wins the election they will introduce a tax policy where childless people will pay three times more taxes than those with three children. Luckily for people without children Viktor Orbán lost the election.

In June 2010, however, the topic surfaced again. Peter Boross, former prime minister and now an adviser to Orbán, suggested the introduction of an extra levy on childless people. At the same time an association established to represent the interests of large families suggested a 10% surcharge “to put an end to individual selfishness.” So, although Benda’s ideas might be outlandish, it is not outside the realm of possibilities that the Orbán government is seriously thinking about introducing some kind of punitive taxation on couples without children despite the fact that the Young Christian Democrats retreated.

A spoof on a famous recruiting poster from 1919. Instead "Into arms!" "Get pregnant!

A wordplay on a famous recruiting poster from 1919. Instead of “To arms!” (Fegyverbe!) “Get pregnant!” (Teherbe!)

Today HVG’s print edition reported that KDNP not only subsidized Benda’s book but most likely also asked him to develop an “action plan.” This action plan is truly outlandish. First of all, most of the suggestions are highly discriminatory. For example, Benda recommends an extra levy only on single women over the age of thirty, as if women alone were responsible for bringing a child into the world. These women would have to contribute financially to families with many children. Benda recommends limitations on abortions for women between the ages of 35 and 40. Infertile women may hire surrogates, something that is currently illegal in Hungary. Benda suggests easier adoption of infants, even from war-torn areas outside of Hungary. Placing babies before the age of one in day care or a nursery school should be forbidden. College students should receive stipends if they are ready to produce children during their college years. Every workplace with ten or more employees, including private companies, should hire a “demographic commissioner” who would be responsible for limiting the workload of women between the ages of 35 and 42. The government should launch a media campaign showing the success stories of women who gave birth at the age of 40. The government should financially support people’s dating, their weddings, the birth of their children, etc.

Hungarians by now know only too well that once these kinds of stories circulate, regardless of how crazy they sound, the government will eventually come up with something that it deems essential for its plans. Since traditional methods for boosting the Hungarian birthrate haven’t worked, they are willing to try unconventional ideas.

The kind of demographic change Viktor Orbán is dreaming about did happen in the early 1950s during the Rákosi period, when the government forbade the performance of abortions and levied extra taxes on childless men between the ages of 20 and 50 and childless women between the ages of 20 and 45. As a result, in 1952 the birth rate spiked: 250,000 babies were born. These people, now in their sixties, are called the Ratkó babies, after Anna Ratkó, who was the minister of health at the time. But then there was no pill and the borders were sealed.

Reading Benda’s wish list, one has the distinct feeling that he wants a dramatic change in the next year or two because otherwise the problem cannot be remedied. But without another set of “Ratkó babies” it cannot be done, and I very much doubt that the Orbán government would dare to cut back on the availability of abortions. Such a move could be suicidal.

In any case, Zita Gurmai (MSZP), former EP member, wants to know the truth: what Viktor Orbán is contemplating. She suspects that if Hungarians are not watchful, the same thing will happen to them that happened when the Christian Democrats insisted on closing stores on Sunday. First the government denies any such plans and then one day they become reality.

The world’s most generous government assistance for a third child

The Orbán government gave a wonderful Christmas present to families who either already have three plus children or who are planing to have at least three children in the next ten years. A couple, as long as they are young enough, can apply for a very generous subsidy for a newly built house or apartment even if at the moment they have no children at all. But there is a caveat: they must be officially married. Those people who have been worrying about all those children born out of wedlock can rest assured. The government is defending the institution of marriage and the traditional family structure even if currently half of Hungarian children are being taken care of by a single parent, usually a mother.

The rules and regulations of this generous package are spelled out in great detail. Those who put it together tried to think of all possibilities, including in vivo insemination and its possible failure as it impacts the contract signed by the state and the couple who agree to produce at least three children in ten years. Almost all the major internet sites summarized the law, which appeared a few days ago. I read the version that appeared on Index. Put it this way, the hopeful couples should begin studying the law because it will not be easy to follow all the rules that will regulate their lives over the next ten years. For those of us who are not interested in participating in this undertaking, these details are not really important. What is important is the country’s financial investment in this demographic scheme. The young couples who decide to embark on this latest brainchild of the Orbán government will most likely hit the jackpot. But will they break the country’s bank?

Although couples whose goal is to produce two children will also get free money, 2.6 million forints, I would like to concentrate here on those with three children either on the ground or still only a twinkle in the eyes of the parents and the state. Here the stakes are high: 10 million forints gratis and 10 million forints in a low interest (under 3%) loan as long as the apartment or house is new construction and of substantial size.

How much will this cost the taxpayers? No one really knows because, as usual, the government neglected to conduct an impact assessment as Ágnes Hornung, undersecretary in charge of finance at the National Economic Ministry, perhaps unwittingly admitted in an interview with Magyar Idők when she said that they are “currently studying the possibilities of [the program’s] financial sources.” They don’t seem to have any idea how many people will take advantage of it, but if current calculations by economists are correct, one would be a financial fool not to participate. Zoltán Balog was the only cabinet member who dared to guess the number of applicants. He talked about more than 100,000 couples. This would involve a financial outlay of more than a trillion forints.

This talk of subsidies and low-interest loans guaranteed by the state brings to mind another Fidesz project initiated in 2000 which a few years later had to be scrapped because it put too great a burden on the budget and added to the country’s indebtedness. Moreover, the project didn’t really alter the demographic situation.

family2Let’s take a quick look at some of the statistics of families with children. In 2011 there were 615,815 families with one child, 449,261 with two, 131,321 with three, 29,043 with four, and 15,686 with five or more children. So, families with three or more children number 176,000 while another 449,000 already have two children. If all the people with three children were to receive ten million forints, that would come to 1,760 billion forints, which is more than all the revenue the government receives from personal income tax in a year. And we didn’t talk about families with two children who just might be tempted to produce a third. Moreover, as it is, these families are eligible for 2.6 million forints even without a third child, which must be added to any calculation. Then there are the very low-interest loans for which the government is responsible. If we add all this up, the cost will be enormous. This plan poses serious risks to the country’s financial well being.

The government, of course, wants to weed out certain undesirable elements whose reproduction is not in the interest of the state. They are the poor, the unemployed, and, as we just learned, those in the public work program. The last group counts as employed only when the Orbán government wants to boast about the fabulous improvements in the unemployment figures. But even without these restrictions only those who are better off will be able to afford to sign the contract. A newly constructed house must be at least 90m² and an apartment 60m². They cannot consist of only smaller rooms; there must be at least one room that is 12m². And the house has to have central heating.

Origo reported on some calculations done by Bankmonitor that show how much couples who take advantage of this new program will gain at the expense of the taxpayers. Bankmonitor took as its examples two apartments, one in Budapest and the other in Debrecen. Both are fairly large: 75m². The average price of such an apartment in Budapest is 40,275,460 forints, while in Debrecen it would sell for 28, 777,620 ft. The new owners of the Budapest apartment will have to pay 20,275,460 out of pocket while the Debrecen couple would need only 8,777,620. Then Bankmonitor compared the monthly mortgage expense at a very low interest rate to one bearing the current 6.9% official rate, which resulted in another 6,786,043 ft savings. One also has to consider the difference between the monthly mortgage payment and renting. The final word is that the Budapest family will be able to own a house at 37% of its market value while the Debrecen couple will have a house at 42% of its market price. As Origo said, “it is worth rushing because the stakes are high.” Mind you, the paper also added: “This is the world’s most generous assistance for the sake of a third child. Can it be sustained? We don’t know.”

If large numbers of people can scrape together the money for a down payment, I have my doubts. To keep it going would need a level of economic growth that is not in the cards right now. In fact, all estimates predict slower growth in the next few years. If, on the other hand, only the affluent can take advantage of this program, it will further widen the gap between the haves and the have-nots, with the poor subsidizing housing for the wealthy.

The homeland needs more babies

I just learned that there is a group of economists who are convinced that opening borders all over the world and thus allowing the free flow of people would have immense benefit to mankind. For instance, Bryan Caplan, professor of economics at George Mason University, claims that such an open-border policy would double the world’s GDP. The website Open Borders offers evidence that immigration for highly developed countries is beneficial, especially if the given country’s birthrate is low. This is certainly the case in Germany where, according to the Statistisches Bundesamt, in order to sustain the present industrial capacity and living standards the country would need about 6 million immigrants between now and 2060. The situation is somewhat similar in the United States where the birthrate has been falling year after year, although it is not as bad as in Germany or for that matter in Hungary. In the United States the current fertility rate is 1.87 per woman and in Canada 1.61. In Germany it is 1.38 and in Hungary 1.34.

Of these four countries it is only Hungary that steadfastly refuses to even consider the possibility of accepting any newcomers. Germany, which at the moment is taking care of almost one million refugees, in the past few years has quietly settled millions of foreigners, among them close to 200,000 Hungarians, more than 500,000 Poles, over 100,000 Syrians, close to 100,000 Iraqis, and 75,000 Afghans. The United States opens its doors to close to a million immigrants every year. As for Canada, papers reported today that Canada is prepared to settle 50,000 Syrians by the end of next year. Germany will take most of the asylum-seekers but wants signs of solidarity from the other member states of the European Union and therefore asks them to accept a relatively small number of refugees. The four Visegrád countries are balking at this request.

In the last few days Hungarian papers were full of stories about László Kövér’s speech at the Fidesz Congress on the duty of women to produce grandchildren for him and others of his generation. Soon enough came the outrageous remarks of the pop singer Ákos, who is a faithful promoter of Viktor Orbán’s regime. Ákos in an interview pretty well repeated what Kövér had to say about women. Their primary role is to produce babies. For good measure he added that it is not “their task to make as much money as men do.”

Kövér’s speech and Ákos’s interview were ill-conceived first stabs at introducing the Hungarian government’s new nationwide propaganda campaign that hopes to boost the country’s miserably low fertility rate. The underlying message is: “We’ve saved you from these Muslim hordes but you, for your part, must have many more children.” According to Katalin Novák, undersecretary in charge of family affairs in the ministry of human resources, the demographic problems of Hungary could be solved if every Hungarian family would produce just one additional child.

The government realizes that, given the low wages, the general housing shortage, the high price of apartments and the small sizes of the existing units, few families will embark on having two or three children. In the last few days all sorts of vague promises were made about lowering the VAT on housing construction from 27% to 5%, but details are missing. No one knows what part of the construction would benefit from the drastic lowering of the tax. In addition, the government promised to give 10 million forints gratis to families who commit to having three children within ten years. These people would also receive a loan of up to 10 million forints with a low interest rate to buy an apartment in a newly constructed building. Although we know few details, critics point out that 10 million for a brand new apartment is peanuts and thus only the better-off families would benefit from the government largess, most likely the ones who don’t really need it.

An ideal Hungarian family

An ideal Hungarian family

Sometime in May we learned that Hungary’s population was continuing to shrink. The equivalent of a smaller town had disappeared within one year. In today’s papers one can find new data on the subject. It is true that 0.5% more children were born between January and October, but the number of deaths rose by 5.5% during the same period. Thus, another middle-sized town disappeared. To be precise, 33,291 people.

How effective the new government measures will be only time will tell, but I’m not optimistic. In fact, I have the feeling that even if there are some small demographic improvements, they will not be nearly enough to replenish the population, which has been decreasing steadily ever since the 1970s. I also predict that emigration will accelerate for at least two reasons: David Cameron’s threats of discriminatory measures against immigrants from other EU countries and the Syrian, Iraqi, and Afghan immigration to Germany. Would-be emigrants heading to the United Kingdom may think that they should go now since no one knows what kinds of new restrictions Cameron’s government will come out with in the next few months. As for Germany, at the moment job opportunities, especially for blue collar workers and unskilled labor, are plentiful, but who knows what will happen once the newcomers are ready to join the workforce. Mind you, it is possible that the Syrian refugees are better educated than the East Europeans working in Western Europe. According to one poll, 86% of Syrian refugees attended high school or university. Of these people 16% are students and 4-5% of them are doctors or pharmacists.

Viktor Orbán’s work-based society and accelerated emigration

While Viktor Orbán is fighting tooth and nail against accepting any asylum seekers and potential immigrants into the country, demographers are painting a dire picture of the next decade or two if current trends continue.

A couple of months ago 444.hu came out with the following headline: “One thing we have learned since the regime change: One can leave.” This quip brought to mind my first few months in Ottawa when on March 15 the mostly 1945 Hungarian immigrants enthusiastically sang Hungary’s “second” national anthem, in which the poet declares “here you must live and die.” Of course, not in Canada but in Hungary. And if you think about it, our romantic poet, Mihály Vörösmarty, wrote his lines in 1836 when the borders throughout Europe were pretty open and a lot of Hungarian artisans picked up their tools and left. Some returned, others didn’t.

Lately several studies have appeared on the history of Hungarian emigration in the last 25 years. In April the Demographic Research Institute of the Hungarian Academy of Sciences published a lengthy study by several authors. Irén Gödri wrote on “international migration”–that is, immigration into and emigration out of Hungary. From this study we learn that emigration in the 1990s was negligible despite harsh economic conditions and high unemployment early in the decade. Only 1.5% of the population contemplated working and living abroad. According to the author, one reason for the low emigration figures was the fairly generous social benefits package at the time.

After Hungary joined the European Union in 2004 emigration quickened, but it was only in 2007 that there was a real jump in the statistics. The Hungarian economic situation began to deteriorate even before the 2008 financial crisis, and by 2012 unemployment among those between the ages of 15 and 24 was 28%. By that time one-third of Hungarians between the ages of 18 and 40 contemplated leaving the country and trying their luck elsewhere. Ten years ago the favorite target countries were Austria and Germany. By now the United Kingdom and Ireland have been added to the list. Gödri estimates that there are at least 330,000 Hungarians who work abroad. In Germany, 124,000; in Great Britain, 74,000; in Austria, 46,000; even in the tiny Netherlands over 10,000. The total is based on adjusted figures from the 2011 census.

departures

The profile of Hungarian emigrants is quite similar to that of the asylum-seekers arriving in Europe today. There are relatively few women, and the men are young. They are what Mária Schmidt, adviser to Viktor Orbán and a vocal critic of Angela Merkel’s refugee policy, the other day called “muscled men with a high testosterone level.” In the target countries 53% of Hungarian immigrants are in their twenties and thirties, although in Hungary they constitute only 28% of the population. From this last figure we can begin to see the deleterious effect of this surge of emigration on Hungarian demographic trends.

Moreover, the educational attainment of Hungarians who have left the country is higher than that of the population as a whole. Apparently, that is also the case with the Syrian refugees. Among the target countries, it is in Great Britain that the educational attainment of Hungarian immigrants is the highest: 36% of them have post-secondary education. In Germany and Austria skilled workers are over-represented.

In April 2015 Tárki, the polling company that has been specializing in migratory trends, found that the desire to leave Hungary and head to Germany, Austria, and the United Kingdom had grown considerably over the previous year. And the number of those who are planning to leave the country permanently went from 5% to 10%. About a month ago a poll was taken to measure the attitude of high school students toward emigration. One-third of them are ready to continue their education abroad while another third are thinking about such an opportunity. Only 15% said that they would never leave the country.

Just last year 31,500 people left the country, a 50% growth over the year before and six times higher than in 2009. So, by now the number of Hungarians working abroad has most likely reached or exceeded 400,000.

A few weeks ago the Központi Statisztikai Hivatal (KSH/Central Statistical Office) came out with a new figure that reveals a lot about the reasons for the accelerating emigration figures. In 2014 920 billion forints worth of foreign currency was transferred by Hungarians working abroad.  This figure surpasses the 2013 figures by 47 billion and the 2012 figures by 236 billion. If we estimate the number of Hungarians working abroad to be 300,000-400,000, each emigrant would be putting away 200-250,000 forints each month. This figure, however, seems too high, so the number of Hungarian emigrants is most likely greater than the estimated figures. I might add that this close to a trillion forints is 3% of the Hungarian GDP.

A couple of governmental decisions over the past five years probably stimulated emigration. One is the government’s decision to cut social benefits to a bare minimum. Someone who loses his job is entitled to only 90 days of unemployment benefits. Since Hungarian salaries are very low, few people are able to put any money aside for a rainy day. According to studies, finding a job under the best of circumstances may take months if not years. One possible solution? Pack up and leave in the hope of earning some income, even if it comes from menial work at the beginning.

As for the students, the introduction of steep tuition fees often makes foreign study more affordable than study at a Hungarian university. Moreover, students are increasingly aware of the fact that most Hungarian universities are inferior to those in western European or Great Britain. The combined effect: students enrolling in droves at German, Austrian, and British universities.

Naturally, low Hungarian salaries are a powerful incentive to seek jobs elsewhere. This is especially true about doctors and nurses who can easily find employment abroad. In fact, medical personnel are actively being recruited in Sweden and Great Britain. Every year at least 1,000 doctors leave the country. Currently there are 3,000 fewer doctors in Hungary than there were a few years ago. Some years the number of medical students who graduate is lower than the number of doctors who leave. Yet the government doesn’t seem to be making a serious effort to raise the salaries of state employees.

In brief, Viktor Orbán’s transformation of Hungary into a “work-based society” (which doesn’t even seem to value work) is largely responsible for this situation, which in the long run will have a disastrous effect on the Hungarian population mix. An aging population with a low birthrate and high emigration figures. And, of course, no immigration.

Demographic realities and Viktor Orbán’s ideas on immigration

Over the past thirty years Hungary has been sliding toward a demographic disaster. And the slide has only accelerated of late. In 2010 the population fell below 10 million. In the first five months of 2011 10% fewer babies were born and 2.7% more people died than during the same period a year earlier. The second Orbán government was keenly aware of the problem and tried, in its own way, to remedy the situation with all sorts of financial incentives, which didn’t work. In 2012 Fidesz MPs delivered optimistic speeches about the beginnings of a baby boom, only to have the Központi Statistisztikai Hivatal (Central Statistical Office) announce in May that 3.6% fewer babies had been born between January and May of 2012 than between January and May of 2011. Between 2010 and 2014 the country’s population decreased by 158,000. And that doesn’t count the 350,000-800,000, take your pick, mostly young people who are working abroad.

Despite the government’s program to entice young couples to get married early and produce at least two or three children, recent studies show that, in fact, both men and women are waiting longer before having their first child. And even if some miracle happened overnight and suddenly all the hospitals were filled with babies, it would be only a quarter of a century later that there would be any beneficial impact. A recent study by the Népességtudományi Intézet (Demographic Institute) predicts that, if current trends continue, by 2060 Hungary’s population will be under 8 million.

Of course, Hungary is not the only country in Europe with very a low birthrate, but according to Péter Mihályi, a professor of economics at Corvinus University, if we ignore the former Soviet republics, it is only Bulgaria that is in worse shape than Hungary in this respect. From government propaganda one gets the distinct impression that Viktor Orbán’s concerns stem from nationalistic considerations. A fear that can often be heard in right-wing circles is that Hungarian speakers will one day be virtually nonexistent and the language will disappear. Mihályi, by contrast, looks at the situation from the point of view of an economist and recommends systematic and well-directed immigration policies as a solution.

In 2001 Viktor Orbán himself realized that the steady decrease in the population and its concomitant aging could be effectively remedied only by inviting immigrants. In 2001 he delivered a speech before the Amerikai Kereskedelmi Kamara (AmCham) in which he outlined a plan according to which in the next five years Hungary could welcome several million immigrants. Otherwise, he said, the country could not maintain its rate of economic growth. He claimed at that point that “Hungary could easily provide livelihoods for 14 million people.” What kinds of people did Viktor Orbán have in mind? Since in connection with immigration he also talked about the forthcoming admission of Hungary to the European Union, he was perhaps thinking of western businessmen settling in Hungary in search of economic opportunities. He also pointed out that every year several thousand ethnic Hungarians from the neighboring countries settle in Hungary. He certainly didn’t have in mind Muslims from the Middle East or refugees from Africa.

Lately, one often hears about the hospitality offered to Croats and Serbs escaping the ravages of civil war in Yugoslavia. In 1991 about 50,000 people arrived from the northern Slavonian region of Crotia, adjacent to the Hungarian border. They were well looked after. A couple of years later, however, 16,000 Muslim Bosnian refugees reached Hungary, who apparently received a less hearty welcome. In a village along the Serbian border Péter Boross, who later became prime minister, announced in 1992, as minister of the interior, that “Hungary is full.” Why were the Bosniaks less welcome? The difference was the refugees’ religion and culture, as a 1994 study pointed out. The author lists all the difficulties Hungarian authorities encountered with the Muslim refugees. Perhaps it was not a coincidence that a year after the arrival of the Bosniaks, the Antall government amended the law on foreigners’ settling in Hungary to make it more stringent.

Refugees from Bosnia. These are the kinds of immigrants Hungary doesn't want

Refugees from Bosnia. These are the kinds of immigrants Hungary doesn’t want

A few years later Viktor Orbán made it quite clear that, although in theory he is in favor of immigration, that immigration should not come from non-Christian countries. The occasion was the refugee problem of Muslim Albanians expelled from Kosovo. Western politicians came to the rescue by offering to fly a certain number of these refugees to their own countries. At this point Orbán declared that “there will be no numerus clausus in Hungary.” All refugees who ask for admission to the country will be welcome. How they would get to Hungary he neglected to say. That’s why a commentator called this “generous” offer “perhaps the most cynical statement of the prime minister’s ten-month tenure.”

So, it is not really true, as most commentators suggest, that in fifteen years Orbán completely changed his opinion on immigration. No, he hasn’t changed a bit: he does not want to have Muslim riffraff in his Christian  country. He especially doesn’t want blacks from Africa in a pristine, white Hungary.

Apparently, despite all the propaganda to the contrary, the government is fully aware of the long-term effects of the current demographic trend. Attached to the 2016 budget is the latest government prediction that by 2034 the number of people living in Hungary will be less than 9 million. That is, if the balance between immigration and emigration is zero, something which, given the recent population movement, is unlikely.

This demographic trend will have serious consequences. First, there is the problem of a rapidly aging society. Fewer and fewer people must support a larger and larger number of pensioners. The number of children is rapidly decreasing. In 1990 there were 2.1 million children under the age of 14. By 2014 there are only 1.4 million. At the same time, the number of people over the age of 65 is growing. That will put an ever increasing pressure on the pension system, especially if the proposed referendum passes, which would allow men, just like women, to retire after 40 years of employment. Those who have only eight grades of education could theoretically retire with full benefits at the age of 54-56.

A decreasing and aging population also means a smaller domestic market, which puts a brake on economic growth. And, according to Mihályi, it limits job opportunities, especially for less educated people. Infrastructure, houses, apartments, tourist facilities, museums, football stadiums, restaurants and pubs will be underutilized. If the facilities and their offerings have fewer takers, prices must be raised. But there is a limit to raising prices. Enterprises can end up being unprofitable, and in this situation fewer people will start new businesses. These are some of the economic consequences of unfavorable demographics that people who keep talking about Hungary’s inability to take up immigrants don’t consider. They think the fewer the better. As Mihályi says, only children think that it is better to have fewer guests at a birthday party because then each of them will have a larger slice of the cake.

Given the huge differences in living standards between the east and west of the European Union, Orbán’s old dream of filling the country with West Europeans cannot materialize for a very long time, if ever. The prospect of ethnic Hungarians coming in great numbers is also unlikely. Romanian living standards are on the rise, and the Hungarians in Slovakia are quite satisfied. The Serbian situation is different. I just read that Serbian men and women in the city of Szabadka/Subotica, where the majority of the population is Hungarian-speaking, are madly learning Hungarian. They want to apply for Hungarian citizenship. Of course, not to settle there. One of the men who figures in the story is already in Berlin. So, Orbán cannot be that choosy.