Hungary has been in the EU for 20 years: how have labor costs changed?

By: Trademagazin Date: 2024. 03. 06. 10:14

🎧 Hallgasd a cikket: Nyelv: Sebesség: 1.05×

On May 1, 2004, ten new states joined the European Union, including Hungary. In our series of articles, we use one indicator to explore how the situation of our country has changed during our 20-year EU membership. The subject of this article is the change in labor costs.

Changes in labor costs affect competitiveness both at the company level and at the national level. Businesses are interested in keeping labor costs low, and states are interested in creating an attractive economic environment for companies, one segment of which can be labor costs (attracting investors with low wages). But what determines labor costs?

In addition to wages and other benefits, taxes and contributions are included, but the regulatory side (minimum wage) also has a strong influence. In addition, demand and supply (labor shortage and unemployment) also drive labor costs. Changes in productivity also play an important role. If the population is more qualified, more productive, and performs work with higher added value, companies will be happy to pay higher wages.