Although the number of employed increased by 80 000 altogether in the past two years in Hungary, in several labour market segments further apt measures are required in order to reach EU average figures.

Typically to such a group belong – besides the 50+ population, unskilled workers and mothers returning from maternity leave – career starters whose high unemployment rate poses a grave challenge for the entire EU. (In the EU currently the number of jobless young people is more than 5 million, which is one million more than in 2008.) In Hungary the rate of unemployment among the population aged 14-25 years is 27 percent, and the situation is even worse in eight member countries of the EU. Of this age group there are 200 thousand people with a job, while more than 70 thousand are out of work. This phenomenon is typically due to two reasons: the lack of appropriate skills and work experience.

Having recognized these problems, the government had taken to firm action: it transformed the system of vocational training, supports employment by contribution subsidies (Start cards), launched a programme aimed at helping young people become entrepreneurs which will be followed by a trainee scheme. The latter programme will be aimed at enabling jobless young people with basic professional skills obtain work experience.

However, in order to help as many career starters as possible to jobs and therefore to work experience, further measures are necessary. The new Labour Code, which commences on 1 July, provides the opportunity for the government to define a differentiated minimum wage. Out of the 27 EU member countries there is minimum wage in twenty of them, and among these in 11 countries there is age-related differentiation, for example in the Czech republic, Slovakia and Poland. And where the system had been implemented, the improvement in the employment figures of career starters has been palpable.

The implementation of a minimum wage system based on age groups will be preceded by a number of consultations. The measures can be implemented in such a way that it may not result in layoffs of older employees. It has to be noted though, that minimum wages are typically paid to low-skilled workers in the manufacturing industry, agriculture and assembly plants, therefore the measure will not impact highly qualified young people with college degrees who speak languages. Currently only one-tenth of career starters are employed for the minimum wage.

(Ministry for National Economy)