One Million Persons Earn Below the Subsistence Level

One Million Persons Earn Below the Subsistence Level

The KSH revealed the rate of subsistence level for 2013 publicly. Accordingly, a monthly income of at least 87,510 Forints was enough last year in Hungary for one to be able to “permanently satisfy the minimum needs for the conduct of life”. During the recent years it has become troublesome even for those with jobs to be able to achieve this living standard from their earnings. The Policy Agenda exhibits the actual tendency in this respect compared to the period preceding the economic recession.

An Increasing Number of Employees Earn Below the Subsistence Level

The data published by the state (National Labour Office’s individual earning and wage statistics) reflect that 25% of the employees earn under the subsistence level. Calculating without the tax allowances for families, they do not earn more than approx. gross 134,500 Forints a month.

Before the economic recession, in 2008, the proportion of those earning under the subsistence level was 18% in the whole national economy. It suggests, that there are more who do not earn enough to satisfy their meagre needs either.

It is important to draw the attention to the fact that the statistics on earnings consider only those employers that have less than 5 employees, so if the less solvent micro enterprises were taken into account, then the situation would surely be worse in respect of their ratios. According to an optimistic estimation made by the Policy Agenda 1 million workers take home less monthly income than an amount that would suffice to reach the subsistence level.

Wages “Consumed” in thePublic Sector

Considering the figures it is also revealed that “salaries deteriorated” most in thepublic sector. In 20084% of the public employeesearned less than the subsistence level. As a consequence of the “frozen wages” the same grew to 16% by 2013. This indicates clearly that the position of the public sector weakened.

The current government can be excused for the “stop-the-gap” measures, having been taken during the recent years, helped to decrease the number of those earning under the subsistence level from 19% in 2010 to 16% as mentioned above. Nevertheless, it also occurred on the first occasion in the same government term that wages in an entire branch of the public sector (namely those employed in social attendance) dropped below the subsistence level.

As regards the competitive sector the situation is less dramatic still it is worse than before the crisis. In 2008, 24% of the employees in enterprises earned less than the subsistence level, but last year this ratio came to 30%. In this respect the current government made the situation even worse, whereas in 2010, at the change of government the same ratio was 25%.

It is essential to add that the national statistics demonstrating the individual earnings examine only the month concerned. The annual average was somewhat betterif the end of the year bonuses would also be taken into account. However, these are just optional, and are not granted under the labour contract. The workers cannot count on such revenues surely.

The poverty of workers is also reflected by the fact that, in 2008, a family with an underage child and earning two minimum wages had a revenue of 52 thousand Forints less than the sum of the subsistence level projected to a household like that. This grew, by 2013, to 60 thousand Forintsthat is the living conditions of those with low income turned to worse.

What Happened to the Pensions?

When calculating the subsistence level households with active earners and pension earning households are differentiated. In the case of pensioners the sum of the monthly subsistence level per capita is78,759 Forints.

The pension statistics of the state show that 21% of the old age pensioners over the age limit earn below the subsistence level. Prior to the crisis this ratio used to be 19% (considering also the effect of the 13th month bonus pension), which suggests that the living conditions of the retired with low pensions turned to worse compared to the year before the economic recession.