Hungary is Working Again
Eurostat recently released the latest European Union unemployment figures showing Hungary’s jobless rate at 7.5 percent, placing it among the EU’s better performers.
While the trend across Europe has improved, the unemployment rate in the 19 countries that make up the euro area (EA-19) remains in double digits at 11.3 percent, down from 11.8 percent last year. Many parts of the EU continue to struggle with joblessness. Seven member states have unemployment over 12 percent, and the rate in four of those countries exceeds 16 percent.
Source: Eurostat
Numbers in Hungary, however, are encouraging, and Eurostat was not the only one reporting on them. The OECD’s recent analysis notes that Hungary’s employment numbers have recovered to pre-crisis levels, adding that these gains need to be sustained. We are optimistic we can do so, but it wasn’t always like this.
Prior to the Orbán Government taking office in 2010, unemployment had reached record highs, ranging from 10 to 12 percent (see here). The government made it a priority to get more people back into the active labor force, and those efforts are now bearing fruit. Hungary is now performing among the best within the EU.
Also encouraging are the latest figures on youth unemployment, a seemingly intractable problem for many EU countries. In Hungary, according to the Central Statistics Office’s (KSH) latest report, unemployment in the 15 to 24 year-old age group dropped by 3.5 percent over the last year to 19 percent, and the average amount of time spent searching for a job changed from 19 to 17.8 months.
In fighting unemployment, the government has put special emphasis on youth, elderly people and women in the work force. The job protection action plan, launched in 2013, focuses on five priority groups: people under the age of 25 or over 55, unskilled and long-term unemployed workers and mothers with small children. The plan boosts their employment prospects by providing significant tax incentives to employers. It has helped 890,000 people, including 150,000 young people, find jobs.
Job creation in Hungary is also backed by the public works scheme, which has served as a way to help those who have been out of the work force for a long period to get back to working again. But one of most important details in these latest employment figures is that the majority of the approximately 400 to 450 thousand new jobs added to the economy are coming from the traditional labor market, not from the public works program.
Prime Minister Orbán has set an ambitious goal to reduce unemployment to around 3 percent, believing that full employment is the pillar of a stable economy. We intend to remain on the present growth path and that should include more job opportunities.
