Economic Reform And Labor Market Reform In Hungary

The section below states that the economic reform and labor market reform in Hungary have immensely benefited the labor force in the country. Unequal distribution of workforce, employment rates in remote areas and government incentives show how that the labor market has developed over time.
One surprising thing to note is that even though the Hungarian workforce is one of the most educated as well as skilled, the wage drawn by them is comparatively low. The labor market has developed to a great extent owing to the economic reforms introduced in Hungary.

The process of privatization has ended. In fact the process, which was initiated by the Hungarian government to change into market economy from a centrally managed economy has also been completed. It is worth mentioning that the people of Hungary are educated and skilled.

The labor force has very few workers who have not qualified in their secondary examination. Majority of the workers have some technical or vocational skill to boast of. Along with reforms in other areas, economic reform and labor market reform in Hungary have not remained behind.

Labor skills:
Statistics reveal that in the last ten years a 10 percent increase has been observed in the productivity of the workers (on a yearly basis). Even though the labor market is skilled, the wages earned by them is not as per their capabilities. Its comparatively cheaper. The distribution of the workers differs from one region to another. Hungary is regarded as one country where the output is more as compared to the incentives enjoyed by the workers.
Rate of employment is uneven:
It has been observed that the rate of unemployment is more in Danube region of Hungary. Rate of unemployment in some areas is more pronounced. Studies reveal that the unemployment rate is approximately s18 percent to 20 percent in the South Western as well as the North eastern parts of the country. As an incentive, those companies who intend to operate in these regions avail of extra benefits from the Hungarian government in form of allowances and direct subsidies.

The norms pertaining to the labor market are contained in the Hungarian Labour Code. The norms are same as any other country but bear more resemblance to legislation of the European Union.
Trade unions:
As part of the Economic reform labor market reform in Hungary introduced trade unions, which would take care of the relationship between employers and employee and between two employees also. The trade unions were entrusted with the responsibility of making the workers know about their rights. The trade unions also had to work on behalf of the employers.
Framing of a Plant Council:
Another step taken as a result of economic reform and labor market reform in Hungary was the introduction of the plant councils. The plant council was responsible for approving or disapproving matters related to the employee.

Some of the prominent areas of its jurisdiction include:
Instances when new policies have to be implemented in the country.
Re structuring of the organization.
Introducing new concepts in the company
There are other areas where the code is applicable. The minimum age of employment is 16 years(excepting apprenticeships, which can be at 15 years). Hungary abides by norms of the ILO pertaining to the rights of the workforce. As labor norms are not so rigid, it encourages competition. New efforts have been executed to support employment on a part time basis. Measures have also been taken to impart training to the workers through educational facilities. By the adoption of all the measures it is being reckoned that worker participation rate may escalate to 63.5 percent by the year 2008 as compared to 60.7 percent in the year 2003. The Labour Code also applies to wage structures in the country.

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Last Updated on : 26th June 2013

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