Labour market, employment
According to the data of the labour force survey,3,879 thousand employed and 329 thousand unemployed people were present in the labour market in 2008. The number of employed was 47 thousand less, while that of unemployed 17 thousand more than one year earlier, thus the labour market tightened. Both the participation rate and the employ- ment rate decreased, while the unemployment rate rose to 7.8%.
Table 1 Main indicators of the labour market
Data in the 4th quarter of 2008 already reflect the effect of the economic crisis on the labour market. The termination of jobs concerned men, the
number of employed men fell by 33 thousand, while that of unemployed grew by 10 thousand compared to the 4th quarter of 2007. The labour market indicator relating to women has not changed significantly. Staff reduction affected first of all manual workers, among them those working in industry and construction, as well as those doing assembling work. In the last quarter of the year, unemployment rate among men increased, while that of women remained on the same level as in the previous quar- ters. Thus, the rates were again equal for the two genders (8%).
Figure 1 Unemployment rate of men and women in each quarter,
2000-2008
Employment rate of population aged 15-24 year somewhat decreased (to 20%) compared to 2007, and the number of unemployed people of same age was 61 thousand, thus their unemployment rate rose to 19.9%.
Employment rate of population aged 55-64 years diminished to some extent (31.4%). The number of unemployed people was nearly 21 thou- sand, and the unemployment rate reached 5%.
In 2008, the proportion of long-term unemployed (searching for a job for at least one year) practically did not change compared to the previous year (48.4%). The average duration of job search rose to 18.1 months.
Labour market characteristics changed differently by regions. In three regions (Southern Transdanubia, Northern Great Plain, Southern Great Plain) economic activity practically has not changed, while it decreased in the other regions, most significantly in Western Transdanubia. The employment situation deteriorated in each region except for Southern Transdanubia, the largest (nearly 1 percentage point) decline was charac- teristic of Central and Western Transdanubia and of Northern Hungary.
The change in the labour market indicators of Western Transdanubia in the 4th quarter indicates that this region was affected first by the econom- ic crisis.
According to the data of the administrative registryestablished for operat-
Major changes in the labour market, January–December 2008
www.ksh.hu Issue 7 of Volume 3. 3 April 2009
1st–4th quarters 2007
population of working age*
Number of employed people, thousand
Number of unemployed peopled, thousand
Number of economically active people, thousand
Number of inactive people, thousand Population, thousand people Participation rate, % Unemployment rate, % Employment rate, %
* 15–61 year-old.
Indicators
1st–4th quarters 2008
15–74 year-old population
4,0 5,0 6,0 7,0 8,0 9,0
2000. I. 2001. I. 2002. I. 2003. I. 2004. I. 2005. I. 2006. I. 2007. I. 2008. I.
%
Men Women
Contents
1
Labour market, employment2
Labour demand3
Wages and salaries4
Net earnings, real earnings5
Labour cost index3,926.2 3,879.4 3,819.4
311.9 329.2 328.5
4,238.1 4,208.6 4,147.9 3,481.3 3,501.6 2,324.6 7,719.4 7,710.2 6,472.5
54.9 54.6 64.1
7.4 7.8 7.9
50.9 50.3 59.0
ing and evaluating the toolkit of unemployment management1, at the end of December 2008, the number of registered jobseekers2 was 477.4 thousand, which meant a 7.3% increase on the same period of the previ- ous year. On the closing day at the end of December, 106 thousand peo- ple received jobseekers' allowance and 152 thousand got regular social assistance for unemployed. On annual level (based on the average of monthly data), the number of registered jobseekers was 442.3 thousand, 3.6% more than one year earlier.
Figure 2 Number of registered jobseekers and that of unemployed people according to the labour force survey, 1999-2008 (quarterly aver- ages)
In both data collections the number of unemployed people was higher in 2008 than in the respective quarters of the previous year but in the last quarter data deriving from administrative sources show a stronger change.
In 2008, on the average, 2,763 thousand people were employed at corpo- rations with at least 5 employees and at budgetary institutions, which is nearly the same number as in the previous year. 722 thousand people worked in the public and nearly 1,953 thousand in the private sector, the latter figure represented a headcount increase of 1%. Within this, the number of manual workers fell, while that of non-manual workers grew.
The number of employees in budgetary institutions diminished by 3.6%.
The headcount increase was the highest at corporations in the "real estate activities and economic services" section (7.7%). The headcount growth
characteristic of "financial intermediation" (5.1%), the larger corporations in "trade and repair" (2.8%) and "hotels and restaurants" (2.7%) contin- ued. The headcount decrease was 3.2% in "construction" and 4.2% in
"electricity, gas, steam and water supply". On annual average, the staff number in "manufacturing" remained on the level of 2007. In the first three quarters a slight (around 1%) headcount increase, while in the last quarter a headcount decrease characterized the industry. In December, 24 thousand fewer people worked here than in October. The biggest fall of staff number was in the "manufacture of machinery and equipment". Due to the economic difficulties, companies dismissed one third of their hired employees. Corporations in the sections "manufacture of wood, wood products, paper, paper products, publishing and printing" and "manufac- ture of textiles and textile products" have already had market difficulties since the beginning of the year, and their headcount fell by about 8% on annual level. Except for the "manufacture of basic metals and fabricated metal products" and "manufacturing n.e.c.", the number of employed peo- ple decreased in every subsection in December.
Within the public sector, the headcount decreased by 1.8% in the section
"public administration, defence, compulsory social security", by 3.0% in
"education" and by 7.3% in "health and social work". Excluding those employed in public work, the section "public administration, defence, compulsory social security" suffered a 2.5% loss in staff.
Labour demand
The number of job vacancies indicates that the long-standing labour shortage has somewhat diminished. The annual average number of job vacancies is estimated to be about 35 thousand, which corresponds to approximately 10% of unemployed people according to the definition of ILO. Due to the deteriorating economic situation, labour demand fell strongly in the 4th quarter.
At the end of the 4th quarter of 2008, 1% of all job vacancies was unfilled, which meant 25.9 thousand job vacancies for which employers took active steps to find candidates to fill. Within this, number of job vacancies was 15.2 thousand in the private sector and 10 thousand at budgetary institutions.
By the end of 2008, labour demand decreased by 40% on the level of nation- al economy compared to the beginning of the year. Within this, job vacancies were by nearly 50% fewer at corporations and by 15% less at budgetary institutions. In the private sector, the most significant decrease was in the manufacturing industry, where the demand fell to one third compared to the
1 The National Employment and Social Office publishes statistics monthly from the register of unemployed.
2 In compliance with the amendment to the Employment Act (IV/1991) on 1 November 2005, the new official name is "registered jobseekers" instead of the earlier "registered unemployed".
100 200 300 400 500
1999. I. 2000. I. 2001.I. 2002.I. 2003.I. 2004.I. 2005.I. 2006.I. 2007.I. 2008.I.
Registered data Data of the Labour Force Survey Thousand persons
Number of employed people, thousand Number of unemployed people, thousand Number of economically active people, thousand Number of economically inactive people, thousand Participation rate, %
Unemployment rate, % Employment rate, %
* Data refer to the population aged 15–74.
Northern Southern
Transdanubia Great Plain
Northern Hungary
Indicators Central Western Southern
Central Hungary
Table 2 Main indicators of the labour market* by regions, 1st-4th quarters, 2008
1,246.9 459.4 424.7 335.5 410.2 513.1 489.6
60.2 28.4 22.1 38.6 63.3 69.7 46.9
1,307.1 487.8 446.8 374.1 473.5 582.8 536.5
924.0 367.5 326.8 369.5 465.2 563.4 485.2
58.6 57.0 57.8 50.3 50.4 50.8 52.5
4.6 5.8 4.9 10.3 13.4 12.0 8.7
55.9 53.7 54.9 45.1 43.7 44.8 47.9
beginning of the year. The least affected section was the "real estate activities and economic services" with a 10% decrease of labour demand. The drasti- cally decreasing labour demand worsened not only the chances of unskilled but also those of skilled people. The worsening economic prospects affected less the labour demand of the public sector. However, the decrease of demand was not the same in the three main fields. The decrease was the largest (33%) in "public administration, defence and compulsory social security", while the demand remained practically unchanged in "education".
In the "health and social work" section, 10% fewer employees were searched than at the beginning of the year, though nearly half of the job vacancies in public sector is still in this section, invariably announced mainly for people with university or college degree.
For international comparison, the data of 18 EU Member States are avail- able. Accordingly, in the 3rd quarter of 2008, the proportion of job vacan- cies was on the average 1.9% in the EU, 0.3 percentage points less than in the first quarter. Except for Lithuania, Cyprus and the Czech Republic, the rate dropped or stagnated in each Member State. The proportion of job vacancies was outstandingly high in Cyprus, but it exceeded the EU average in the Czech Republic, Germany, the Netherlands, Estonia, Great Britain and Romania, too. In about half of the countries, similarly to the situation in Hungary, the proportion of job vacancies was below 1.5%.
Figure 4 Proportion of job vacancies in international comparison,
3rd quarter, 2008
Wages and salaries
Average gross earnings, income from work
In the 1st-4th quarters of 2008 the average gross earning of full-time employees at corporations employing at least 5 people and at budgetary institutions was HUF 198,900, within this it amounted to HUF 192,400 in the private and HUF 219,000 in the public sector. On the level of the national economy, average gross earnings grew by 7.5% on the whole, within this a more modest increase (6.2%) characterized the public sec- tor, while a slightly larger growth (8.4%) occurred in the private sector.
In 2008, one of the central measures affecting the private sector was the modest, 5% rise of minimum wage from HUF 65,500 to HUF 69,000. The other was the introduction of the second phase of wage minimum con- nected to educational attainment, which affected towards the rise of aver- age earnings. In the private sector, manual workers earned on the aver- age HUF 131,300, while non-manual workers HUF 299,400. In the growth rate of gross earnings the difference was 1.7 percentage points between the two groups in favour of the second one (6.5% and 8.2%, respective- ly). In non-manual occupations, the weight of premium elements depend- ing on the performance of the corporation increased in 2008, thus in the dynamics of regular wages, the difference between the two groups is smaller (0.9 percentage point). The 0.2 percentage point lag of the alto- gether 8.2% growth rate of regular wages (without premiums, bonuses, 13th month payments) from the growth rate of gross earnings indicates that the weight of casual payments (premium, bonus) was somewhat greater than in the previous year. The proportion of non-regular payments was the highest (21%) in the financial sector, which resulted in outstand- ing income rise even on annual level for the people employed here. The high rate of income rise was partly due to the fact that in financial inter- mediation bonuses for the performance in the previous year were paid at the beginning of 2008.
In the section "real estate activities, economic services", the earnings growth of 12.9% is partly explained by the increasing proportion of non- manual workers with higher earnings (earnings of manual workers rose by 7.4% while that of non-manual workers by 10.7%). The dynamics of earnings were above the average in the sections "hotels and restaurants"
(9.2%), "trade, repair" (8.6%) and "electricity, gas, steam and water sup- ply" (8.2%). Earnings growth was below the average in "construction"
(7%), "transport, storage and communication" (6.8%), in "manufacturing"
(6.4%) as well as in the three sections characterized by the predominance of the budget. Within manufacturing, being in the middle of the ranking by the dynamics of earnings, the gross earnings growth index of "manu- facture of wood, paper, publishing and printing" was 12.7%, while in
"manufacture of textiles, textile products", "chemical industry" and "manu- facture of basic metals, fabricated metal products" earnings growth was below the increase of minimum wage.
The change in monthly earnings of employees at budgetary institutions is influenced specifically by the agreement concluded in 2007 about the payment of the 13th month salary in advance, in instalments.
Accordingly, from July 2007 one-twelfth of the 13th month salary was paid each month. Its effect equalized during the first half year, as the same number of instalments was paid both in the base period and in the reference period. In the first quarter the 4/12th of the13th month payment in 2008 (+) and the 6/12th of the 13th month payment in 2007 were opposed to the total 13th month payment in the basis. From June, how- ever, the earnings of both the base and the reference period contain 1/12th of the separate one-month allowance as advance payment. A measure in 2008 was that in June and November 2008 a wage supple- ment of HUF 15 thousand and HUF 20 thousand, respectively was paid uniformly in the public sector as a compensation of the inflation higher than expected and exceeding the planned average wage rise of 5%.
0 10 20 30 40 50
2006. I. II. III. IV. 2007. I. II. III. IV. 2008. I. II. III. IV.
thousand
Corporations Public sector Non-profit
0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0
Spain Luxembourg Bulgaria Latvia Slovenia Sweden Hungary Slovakia Poland Finland Lithuania Romania Great Britain Estonia Netherlands Germany Czech Republic Cyprus
%
EU-average
Source: Eurostat, Newcronos.
Figure 3 Number of job vacancies, 1st quarter, 2006-4th quarter, 2008
Table 3 Monthly change of average gross earnings and within them regular wages at budgetary institutions
In 2008, the growth rate of gross earnings was similar to that of regular wages in the public sector, too (6.2% and 6%, respectively). Average net earnings calculated on the basis of gross earnings increased by 5.9%.
The average gross earnings of employees in sections "public administra- tion, defence, compulsory social security" and "education" rose to the same extent, by 5.5%, while that of those working in the "health and social work" section increased by 6.7%. The relative situation of certain budgetary areas was influenced by a methodological change, too: in 2007 and 2008 a group of manual workers characterized by low wages was transferred from the section "public administration, defence, compulsory social security" to the section "education" due to the change in nomencla- ture. By filtering this methodological effect, earnings growth is by 0.8 per-
centage point lower in public administration and by 0.1 percentage point higher in education.
Net earnings, real earnings
In 2008, the net value of average monthly earnings was HUF 122,000 which exceeded by 6.8% that of the previous year.
In 2008, from the beginning of the year, real earnings were less and less behind that of the previous year, and progressing in time, they corre- sponded to the level one year earlier in the period of January-May. In 2008, real earnings exceeded on the whole by 0.7% that in 2007. Within this, the real value of earnings increased by 1.2% in the private sector, while it fell by 0.2% at budgetary institutions.
Table 4 Average gross and net monthly earnings, consumer price index and real wage index
Labour cost index
In the 4th quarter of 2008, costs of labour in industry were 2.3-fold of that in 2000 and exceeded by 6% the costs in the same period a year ear- lier. Within this, on the basis of the previous year, manufacturing was characterized by somewhat more modest growth, while in construction the increase was higher than the average in industry. Labour costs in the business sector (sections C-K) grew by 7% over one year. This growth exceeding the average in industry was due to the outstandingly rapid growth of income from work in the sections "financial intermediation, eco- nomic services" and "real estate activities".
Within labour costs, compared with 2000, a significant growth occurred in income from work amounting to the largest part of labour costs. In the 4th quarter of 2008, its amount per one performed work-hour was in eco- nomic sections C-K 2.5-fold of the value in 2000. At the same time social costs per one work-hour increased twofold in the given period. In the pri- vate sector, similarly to labour costs, hourly income from work grew by 7% compared with the 4th quarter of 2007. Concerning social costs, their increase is estimated to be 6% over one year.
HUF/person/
month
corresponding period of the previous year
=100,0
HUF/person/
month
corresponding period of the previous year
=100,0
January February March April May June July August September October November December Year, total January February March April May June July August September October November December Year, total
2008 2007 Period
Average gross earning Within this: regular wage
gross net gross net
1990 1995 2000 2005 2006 2007 2008
HUF/person corresponding month of the previous year = 100,0
a) Based on the average net wage index.
Year
Consumer price index
Real wage indexa) Average earnings of full-time employees
329 775 105.6 178 095 106.2
173 502 101.0 170 603 102.0
181 641 105.2 174 191 105.8
180 611 100.6 169 851 99.8
183 638 99.9 174 468 101.3
200 124 108.0 173 110 101.4
197 231 109.3 175 864 103.6
187 762 108.0 171 324 101.3
188 092 107.8 171 955 102.1
198 652 108.5 171 364 100.8
230 192 114.0 180 151 101.4
224 825 107.2 176 020 101.8
206 225 106.3 173 898 102.3
281 652 85.4 184 703 103.7
193 998 111.8 178 170 104.4
204 671 112.7 185 341 106.4
203 709 112.8 180 703 106.4
207 461 113.0 186 576 106.9
225 648 112.8 185 898 107.4
210 530 106.7 185 464 105.5
199 463 106.2 181 970 106.2
201 445 107.1 182 912 106.4
218 883 110.2 182 399 106.4
261 197 113.5 192 477 106.8
220 118 97.9 185 746 105.5
218 993 106.2 184 363 106.0
13 446 10 108 128.6 121.6 128.9 94.3
38 900 25 891 116.8 112.6 128.2 87.8
87 645 55 785 113.5 111.4 109.8 101.5
158 343 103 149 108.8 110.1 103.6 106.3 171 239 110 896 108.1 107.5 103.9 103.5
185 017 114 282 108.0 103.0 108.0 95.4
198 942 122 047 107.5 106.8 106.1 100.7
98 100 102 104 106 108 110 112 114
January 2006 February March April May June July August September October November December January 2007 February March April May June July August September October November December January 2008 February March April May June July August September October November December
%
Average gross wage index Average net wage index
Figure 5 Average gross and net wage index by months, January 2006-December 2008
Information, links:
Tables Methodology
Availability:
erika.molnarfi@ksh.hu Phone: 345-6245 Information service
Telefon: 345-6789 www.ksh.hu
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