The shortage of skilled labour in Hungary is gaining pace, as Hungarians in the northwest of the country not only opt to work in neighbouring Austria for higher wages, but more recently in Slovakia as well. Not too long ago, it would have been pure folly to imagine that Slovakia would become a desirable destination for Hungarian skilled labour.
According to the Hungarian Central Statistical Office, 117,000 residents of Hungary now work abroad. In just the last three months, an additional 9,000 Hungarians have decided to seek employment in neighbouring countries. So unlike the more than 500,000 Hungarians who have emigrated, these Hungarians mostly work in neighbouring countries for much higher wages than what they would earn at home for comparable work, but still actually live in Hungary. For Hungarians living in towns like Győr, Komárom or Sopron, it is manageable to work in either Slovakia or Austria and return home each day to Hungary. Many Győr residents, for example, commute to the Bratislava area and work at the local Volkswagen factory. In contrast, just a few years ago, Győr’s expansive industrial park attracted hundreds of Slovak workers.
A Hungarian worker at the Audi plant in Győr, Western Hungary.
When the half a million Hungarians who have emigrated are added to the 117,000 Hungarians who now work abroad, we can see that the active workforce in Hungary has declined by about 8%. In places like the Lake Balaton region, finding staff in the hospitality industry has become a daunting task for local restaurants, bars and hotels. Some restaurants are simply unable to open, for lack of workers.
“In the past, the problem was the lack of properly trained professionals. Today, the problem is that there simply aren’t any people at all. It is even difficult to find people when the employer offers training or is simply looking to fill the role of an assistant,” remarked Szabolcs Horváth, the president of an alliance of industrial companies, based in western Hungary. Two counties are especially hard hit by the labour shortage, namely Győr-Moson-Sopron and Vas county. In an article entiled “Hungary has emptied out,” the Határátkelő website notes that in Vas county, it is no longer job seekers with resumes who stand in line, but companies looking desperately to fill vacancies who must queue for potential workers.
A map depicting Hungary’s counties. Győr-Moson-Sopron county and Vas county, both in the west, are bleeding away skilled labour to Austria and Slovakia at an alarming rate.
The only viable solution would be a dramatic increase in Hungarian wages, in order to make them more competitive. Some suggest that a 30% wage increase is needed, in order halt the brain drain and outflow of skilled labour.
Not surprisingly, the jobless rate in Hungary fell to just 5.1%, but the Népszava daily warns that one must exercise caution when quoting these statistics. This figure takes into account the 232,000 people employed in public works projects, as well as those Hungarians who still reside in Hungary, but work in neighbouring countries. Nonetheless, the 5.1% rate is 1.8% lower than during the second quarter of 2015. The only problem is that the decline in joblessness is not due to the creation of meaningful and well-paying new employment opportunities.
I’ll share one personal, anecdotal example of what is happening in Hungary. One of my cousins, also in his mid-thirties, spent the last fifteen years working in mid-range, and by Hungarian standards reasonably paying jobs. When his most recent employment ended, he looked for new employment and two reputable companies quickly took an interest in him. Instead of taking any of the job offers that are likely to come his way very soon, he told me over the phone today that he plans to emigrate, and will most likely settle in northwestern Europe.
Tens of thousands of Hungarians are following a similar path and Hungary’s active workforce continues to dwindle at an ever faster pace, while companies struggle with extended vacancies.
