Hungarian Employees in the Member States of the European Union
Hungarian Employees in the Member States of the European Union
Hungarians are present in several countries around Europe and the world, but their number is insignificant, either in any of the host countries’ population or in relation to the foreigners living there.2 There has not been any significant emigration from Hungary for a long time, and, especially due to the limited job opportunities, exceptionally few (approximately 25 to 30 thousand) Hungarians work – legally – in Europe.
The Association Agreement between Hungary and the European Union that entered into force on 1 February 1994 has not facilitated active movement for the labor force. The Agreement referred the regulation of such labor force movements to the bilateral relationships between Hungary and the various Member States. The approximate number of the Hungarians working in the Member States of the European Union is given in the quotas of the bilateral agreements.
In this sense (and including the roughly 9,000 Hungarian employees3 working in Austria under an Austrian internal quota), it is clear that the overwhelming majority (i.e., 20 to 22 thousand people) of Hungarians staying with a work permit in Europe work in Germany and Austria.
The fact that even in Austria, the Union’s Member State employing the most Hungarian employees, Hungarian nationals represent only some 3% of the total foreign labor force clearly illustrates the magnitude of the Hungarian labor force’s current migration. Moreover, it turns out from a breakdown by territory and by job type that Hungarian employees are concentrated primarily around Burgenland, Lower Austria, and Vienna which, thus, corresponds to 40%, 20% and 20%, respectively, of Hungarian employees working in Austria. So, these three regions absorb more than 80% of the Hungarian employees in Austria.
The cooperation in labor affairs between Austria and Hungary is exemplary in many respects in this area. Under the agreement on commuting in the border zones, made between the two countries as early as in 1998, of the annual 550 people 250, 120 and 180 individuals took jobs in agriculture, tourism and in other positions, respectively, in 1999, and the quota was raised to 900 people from the beginning of 2000. The agreement also allows that “considering the position and the development of the labor market, each party may suspend the agreement temporarily, wholly or partly”. The quota for 1999 was exhausted, and both the Austrian employers and the Hungarian employees warmly welcomed the agreement.
Thus, neither Hungarian, nor international studies support the political or economic concerns of the Union or the Member States of a massive migration of the labor force. The findings of the Hungarian studies forecast a low and stagnating, i.e., 3-4%, willingness to work abroad for a specified duration and a 1-2% willingness to emigrate. The index, called the “migration potential”, which shows Hungarians working abroad for a brief or extended period along with emigration, has remained unchanged for several years, it is about 6% even while Hungary is closer to its accession with the EU. According to the results of a survey conducted among young Hungarians, 52% of them have already considered continuing their studies abroad while 55% of them have thought of working abroad as a potential long-term prospect.
An important conclusion to be drawn from that survey is that hardly more than one third of the most mobile social group – aged between 15 and 20 – have more or less well-developed ideas about migrating, which, understandably, results in a higher proportion of them than adults that consider living abroad for a short or longer period. Typically, however, they fundamentally regard working abroad as a means that helps them achieve their goals faster in Hungary.
The strongest motivation for working abroad, by the way, is someone’s intention to migrate in the given individuals’ environment and their own previous experience. The economic and living-standard-increasing effect of migration4 is much lower than that, although the younger and the higher qualified someone is, the more likely is their intent to migrate. Men, students and the unemployed would take some jobs abroad with pleasure while poverty and Romany origin do not increase migration potential. The impact of psychological factors is insignificant but satisfaction with health and the belief in the skill of finding one’s ways around the ‘things of the world’ have stimulating impacts on migratory plans. According to the combined effects, measured using several factors, it is not dissatisfaction with living standards (or with the future or an economic or political situation) that mostly enhances Hungarian people’s willingness to migrate. In other words, such intentions are rather driven by a “welfare” migration based on taking advantage of opportunities and the desire for a better life rather than an escape that some repelling forces might cause.
It is therefore necessary to discuss the argument most frequently voiced by Member States in relation to their concerns about the labor force’s movement, i.e., the issue of wage differences. Our relative lag behind the EU average is less regarding Hungary’s level of economic development than in terms of wage level. At purchasing power parity, the Gross domestic Product per capita in 1999 approaches 50% of the EU’s average, while wages achieved around 30% only. Hungary’s GDP ratio as compared to the EU, however, can be considered better now than that of Portugal upon its accession. Lower Hungarian wages, however, are not accompanied either by low social benefits or low labor standards. Hungary does comply with the internationally recognized social and labor standards. Hungary has joined all the labor conventions of the International Labor Organization (ILO), which embraces basic human and employees’ rights. It has recently ratified the Social Charter of Europe, and will, by the time of its accession, have adopted and applied the Community’s social welfare achievements. The level of Hungary’s social welfare services is not lower than justified by the level of the country’s economic development. On the contrary, as was shown in the OECD’s country report in 1997, the proportion of Hungary’s social security expenditure is one of the highest among the OECD countries.
Also note that our lag relative to the EU average is approximately as much as the difference between the Member States with the lowest and the highest wages, while our backlog as compared to the EU Member States with the lowest wages is much less than the differences between Member States, i.e., the difference between the Member States with the lowest and highest indicators.
The effect of wage differences, not decisive by themselves but occasionally capable of orientating in certain circumstances, has been fading with a most recent piece of the Community’s legislation on labor issues, Directive 96/71/EC on employees delegated abroad in the framework of providing services, whereby employees delegated to another Member State by a business organization should be granted the same labor conditions that prevail in the host country, with this requirement also applicable to wages.
The alignment of Hungarian wage levels to those of the European Union can be realized – subject to the country’s prevailing economic situation – as an integral part of Hungary’s general economic alignment, on the longer term. The expected increases, in excess of the EU average, in the Hungarian GDP and productivity provides an opportunity even in the short term to raise real wages above the EU average and, thus, to approach EU wage levels. The alignment will be realized in a differentiated way. Such a trend with changes in the proportion of Hungarian earnings is already observable (e.g., companies with foreign owners, managers, and highly qualified professionals). In the competitive sector, the alignment will have to take place automatically, in line with changes in output.
