Can people under 25 really earn more than older workers?

By: Trademagazin Date: 2024. 04. 22. 11:37

The tax discount for those under 25, introduced two years ago, is still the subject of debate: according to some, it had a motivating force and activated young workers, while according to other experiences, it caused significant wage tension between the generations. In addition, it is also a challenge for employers how they face the problem of a sudden decrease in salary upon reaching the age of 25, which is also “fuel to the fire” in terms of turnover and wage demands within the company. Can career starters under the age of 25 really take home a higher salary than their older, more experienced colleagues? What measures should be taken to ease the wage tension and what should be avoided? The Human Centrum HR service company group has collected the most common experiences and practices so far.

According to the latest data from the Central Statistical Office (KSH), the gross average salary increased by 14.2% last year, which is considered a rapid increase, but since inflation was even higher, the real wages of workers fell: almost 3% real wage in Hungary. At the same time, recent data from Eurostat highlighted that, after Romania, labor costs increased the most in Hungary in the last quarter of 2023.

Employers have found themselves in an increasingly difficult situation: in addition to trying to meet their staffing needs, they also have to deal with the prevailing wage tension and the ever-increasing wage demands of employees. This is further strengthened by the tax relief for young workers introduced in 2022 (tax exemption), which transformed the labor market in many ways.