Earnings in real terms, including family tax allowances, have increased markedly, by more than 70 percent in the period 2010-2018. As in 2017, employees earned an extra month worth of wages in 2018, and this has greatly improved the finances of families.

Gross and net earnings were both up by more than 11 percent last year, while wages in real terms increased by 8.3 percent year-on-year. Thus, the upward earnings growth trend has been unbroken for six years now.

Earnings in the bottom wage bracket (minimum wage) have more than doubled since 2010, but those in higher categories have also increased robustly. In 2018, net earnings in real terms, including family tax allowances, grew on average by 47.5 percent in comparison to 2010. The real earnings of employees with more than one child increased more than the average: those with two children and three children saw earnings growth of some 59 percent and 76.5 percent, respectively, in the period 2010-2018.

Thanks to the Government-initiated six-year wage agreement, rising labour demand in the private sector and public sector wage hikes, gross and net earnings gained more than 25 percent over the past two years alone. In the private sector, earnings were up in 2018 by 11 percent year-on-year. Among blue-collar workers the increase was even higher, at 12.6 percent. This signals that the favourable growth trend is set to continue also in the private sector.

The six-year wage agreement is expected to stimulate hitherto inactive people to seek a job and help keep Hungarian labour force. Rising earnings in coming years may drive economic growth higher through the increase in household consumption.

(Ministry of Finance/MTI)