VOSZ: minimum wage of 1,000 euros and an average salary of 1 million

Considering that the government constantly communicates its salary increase plans for the coming years, the VOSZ has also developed its position on the negotiations. Our proposals and the reasoning behind them can be summarized as follows, based on feedback from entrepreneurs:

In the last decade, the so-called “high-pressure economic policy” prevailed in our country, which meant that the wage level increased significantly more than the increase in productivity. The government’s intention and pressure resulted in wage dynamics disconnected from productivity through the forced increase of minimum wage rates.

The wage agreement cycle starting in 2017, in addition to forced wage pressure, resulted in a significant reduction of public burdens (taxes and contributions on live work): the social contribution tax was reduced from 27% to 13%, and TAO and KIVA were also reduced. All of this, in addition to the dynamically growing economic and demand conditions typical of the second half of the 2010s, resulted in a sustainable economic policy system, with increasing household, corporate and state incomes, as well as an improvement in the employment situation. This “subsidized wage competition” also contributed to the healthy evolution of businesses: new, more competitive businesses began to replace companies unable to adapt, but this did not cause mass company collapses or disruptions in employment.

Today, however, the COVID crisis and the successive energy, interest, credit, exchange rate, inflation and war crises have reduced the growth opportunities of companies, demand, consumption and productivity potential. According to KSH data, the number of social enterprises has been continuously decreasing since the end of 2022, and there are now 21,000 fewer registered companies, so on average 1,000 fewer companies are formed per month than are closed. The value of the VOSZ Barometer entrepreneur sentiment index for the 3rd quarter of 2024 decreased again, the number of companies refusing a salary increase reached an unprecedented level of 81%.