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Welfare beats employment

Many in Hungary believe it, is not worth having a proper job as long as one can earn more by receiving welfare and some additional earnings on occasion, chairman-CEO of auditing firm Deloitte Péter Oszkó said.

The introduction of a flat-key tax system would not yield so much in employment as in the improvement of tax morale, as the flat rate may cut the proportion of grey revenues in Hungary’s economy, Oszkó said. However the single-bracket scheme would not be an immediate remedy to all problems, because as long as 1.5 million people officially earn the minimum wage or maximum double of the amount, the government will have to coerce those to pay more whose employer keeps legit records of channeled salaries. The tax-free status of the minimum wage will keep encouraging both employers and employees in the future to accept this odd form of employment, Oszkó said.


Conditions of part-time employment, as well as professional training should be improved in the new member states of the European Union, a workshop organized by Unicredit Bank and Tárki Zrt noted on Friday. Women and the 55-64 age group mean the reserves of the labor market in these countries, but these two groups can often not work full-time, that is why part-time employment should be encouraged, Hedvig Horváth said on behalf of the CEU university. CEU examined how many people are regularly employed in a household. In the European Union usually 20% of all households have no employed adult and about 10% of the EU’s population lives in these homes.

Employment is closely related to education in Hungary, more than 56% of women who have not even finished primary school are unemployed, state secretary of the Social and Labor Ministry Judit Székely said. From the working-age population, 1.5 million people had no specialized training, Székely said. Only 4% of the employed population can work part-time, this proportion is 20-25% in Western Europe, she added.

The workshop also debated, whether the minimum wage was necessary to uphold. Székely defended the idea, but director of the central bank (MNB) Ágnes Csermely and institute director of the Hungarian Academy of Sciences (MTA) Károly Fazekas rejected it. (Gazdasági Rádió)