Distribution of earnings changes in Hungary, 1st half 2024
In the first half of 2024, the dynamic earnings growth continued in Hungary, with the average gross earnings of full-time employees increasing by 14.0% in nominal terms compared to the same period of the previous year.1 This was largely driven by the 15 and 10% increases in the minimum wage and guaranteed minimum wage implemented at the end of last year, as well as by pre-scheduled wage rises in public service sectors (especially the measures taken in public education and vocational training, the second stage of wage increase for health professionals, and the wage increases in the armed forces) and announced wage increases in large public enterprises and commercial chains. In addition, the wage-raising effect of additional labour demand was still significant in some economic branches.
There were significant differences behind the growth at the economy-wide level.2 Nearly 90% of individuals with full-time jobs saw their gross earnings rise compared to the same period of the previous year. Every second employee saw their earnings rise between 5.0 and 24.9%. However, mainly as a result of the moderate pace of earnings growth in the private sector, the proportion of those who experienced an increase in earnings of at least 15% was slightly lower (by 3.8 percentage points) than in the first half of 2023.
The change in earnings is not only driven by the change in the basic wage, but is also significantly influenced by, for example, the change in the direct remuneration, the amount of allowances, bonuses and premiums and their timing or non-payment, depending on the length of time worked. In addition, changes in workers' responsibilities, jobs and employers also affects their earnings.
In the first half of 2024, the distribution of the change in earnings was influenced by the persistently dynamic growth of regular earnings and the moderate growth of non-regular earnings (premiums, bonuses, 13th month and additional monthly payments).
Differences across economic branches are also clearly marked in the distribution of earnings changes. As a result of the rise in teachers’ salaries in January, education continued to have the largest and most extensive increase in wages, affecting the highest number of employees. Human health and social work activities as well as water and waste management also had an outstanding share of workers with a salary increase of over 25%, driven by the wage rises for health professionals and water management workers. The moderate pace of gross earnings growth in manufacturing was supported by the fact that this sector had one of the highest proportions of employees with declining earnings and the lowest proportion of employees with wage increases above 15%.
As a result of the significant rise in nominal earnings and a marked decrease in inflation, the share of individuals whose net earnings fell in real terms decreased from 73.8% to 18.9% compared to the first half of the previous year.
Expected next release of data for 1st–3rd quarters 2024: December 2024