In its comprehensive analysis, the Századvég Research Institute pointed out that a minimum wage of 200,000 is a realistic government goal.
The results show that there have been no adverse effects to raising the mandatory minimum wage to a more acceptable level. The most frequently mentioned disadvantage of the rapidly rising minimum wage is that wage growth slows. However, the opposite effect can be seen in Hungary. Between 2017 and 2020, net salaries increased significantly everywhere.
Meanwhile, the average growth in the national economy was 65 percent.
Under left-wing governments, the value of the minimum wage decreased significantly—employment fell and poverty rose. Hungary became the last country in the region by 2010.
In 2002 Hungary still had the highest minimum wage in terms of real value among the V4 countries. The Hungarian value was 11 percent higher than the average of the Czech, Polish and Slovak indicators; however, by 2010 Hungary was in last place. At that time, the domestic real minimum wage was 16 percent below the average of the other three countries.
After 2010, the real value of the minimum wage in Hungary increased by 67 percent, while in the other V4 countries the rate of increase was 47 percent.
Between 2010 and 2019, a 103 percent increase in the nominal minimum wage compensated workers for a 22 percent increase in the consumer price index and 29 percent increase in the subsistence level.
Between 2002 and 2010, left-wing governments raised the value from HUF 50,000 to HUF 73,500, corresponding to an average annual increase of 4.9 percent. Right-wing governments have almost doubled this rate, raising the statutory minimum to HUF 167,400 in 11 years, an average annual increase of 7.8 percent. In the meantime, employment has also expanded at an outstanding rate.
In addition, the risk of poverty has decreased for all social groups, and the situation has significantly improved for the most vulnerable.