Businesses are scrambling for workers in Hungary
nytimes.com
nytimes.com
The law primarily regulates the terms of collective bargaining agreements. Most EU countries provide for such agreements to include a maximum amount of overtime for scheduled hourly workers. Some countries, like the US and Netherlands, don’t specify any maximum. The new Hungary law raises the overtime limit from 250 hours per year to 400. (France, for example, is 220. Norway is up to 400 by individual agreement. In California, there is no annual limit, but workers can’t be disciplined for not working more than 72 hours per week. The Netherlands has no annual limit, but a limit of 60 hours per week. In the new Hungary law, the maximum per week is 48.)
The three years is not how long employers have to pay for the extra hours, but refers to the “reference period” in the collective bargaining agreement over which what counts as overtime is calculated. People must still be paid their hourly rate for those overtime hours. A reference period in excess of court months, moreover, can only be set forth in a collective bargaining agreement.
Calling raising the limit on maximum overtime a “slave law” is propaganda, pure and simple. (Unless you subscribe to the notion that working for someone who privately owns the means of production is “wage slavery” but if that’s the case you should flag that premise to avoid misleading the reader.)
That sounds like a great deal... for the employer.
Source: Austrian with Hungarian partner, and with friends in Hungary.
The three year reference period also can only be used in a collective bargaining agreement. (Otherwise it’s four months.) So you’re not talking about an individual negotiating with the company under threat of losing her job. It’s the union negotiating with the employer. You’re saying even that isn’t enough—it’s slavery unless the law prevents the union from negotiating a higher reference period. That’s propaganda.
Example for workers rights: Currently unemployed people get benefits for some time and after that the state will employ them (see közmunka) for less than minimum wage. In practice, what happens is that some companies previously employed workers with minimum wage, let them go and re-employed them for a lower wage via the state. This in turn creates an incentive to keep those workers in this perpetual state, because it's less desirable to employ them directly. (And no, they don't get any more money from the state or anything to match the loss of wage)
The three year reference period doesn’t apply to those workers. If there is no union, there is no collective bargaining agreement, and without a collective bargaining agreement the maximum reference period under the law is 4 months (similar to the rest of Europe). As to hours, the new Hungary law is not crazy out of line with that of other countries, especially the more market-oriented/capitalist European countries. The Netherlands and Denmark have no annual overtime limit. In the Netherlands you can be asked to work up to 60 hours per week. In Denmark it’s 48 hours. Norway has a limit of 400 hours by agreement. The new Hungary law works out to being the same as Norway, similar to Denmark, and less than the Netherlands. Austria has an extremely low limit (60 hours). Maybe that’s a good idea and maybe it’s not. But people in Norway aren’t “slaves.” Calling more liberalized, but still within the mainstream, labor regulations “slavery” is propaganda. And it’s propaganda to try and make readers think workers are being told to work for free.
So in California, it's not illegal to discipline your employees for working a mere 70 hours per week?
> He tried recruiting workers from small villages, with scant success. So last year, he began to recruit deaf employees. He refitted his machines with blinking lights and retrained managers to work with deaf people. Mr. Katona has streamlined operations to improve efficiency, including adding more robotic machines.
In a counterfactual situation where immigration continued, it seems like these Deaf people wouldn’t have been able to get jobs. On the other hand, the immigrants who couldn’t come are just as human and now lose the opportunity for the jobs.
It makes it feel like a zero-sum situation, although I know that according to economic theory freedom including the freedom to migrate would allow greater efficiency and wealth for all.
As far as I'm aware, migration increases wealth, I don't think its necessarily distributed evenly. That's where govt policy's should be stepping in.
Actually, Hungarian companies do bring immigrant workers form Ukraine, etc. despite what Orban preaches, but apparently it's not enough.
I heard about foreign construction workers where the company added translators to the crew, so the construction manager can talk to the workers via the translator. I don't know how efficient this is in practice.
More likely it just pits the most vulnerable against each other in a race to the bottom, and gives those with power in the system even greater power.
The argument from 'economic freedom' or 'liberal democrat' types is that the system would be more efficient overall, which might be true - but it's not very good at the 'distribution of surpluses' problem.
We have plenty of productivity in the world, the struggle is how to get it spread around fairly.
The answer to the 'economic desperation migration' problem mostly has to do with solving the host of problems from whence these people have come. Surely there will always be calamity causing a bump in migration, just as surely as regular migration will go on (regular ex-pats changing jobs, getting married to someone from another country etc.) ... but the 'greatest good' will definitely surround getting dysfunctional places to be somewhat more functional.
Also, once countries reach ballpark parity with one another, the rate of migration normalizes quite a lot, to numbers that nobody is going to be bothered about and there'll be nothing to get all populist about.
But the law itself is ridiculous ... for a so-called populist government ... this must be one of the most utterly 'un-populist' concepts imaginable.
This would be political suicide in any country, any regime, and flag, any political stripe.
Truly what were they thinking?
Edit: for some numbers: Italy has over 5 million foreign nationals residing there (8.3% of the population), the largest group among them are Romanians. Italy has also received 700 000 irregular migrants (only those that are counted) from the Med. [1] They have an unemployment rate of 11%.
Spain has also about 5 million for a total of 10% [2] of the population and a whopping 20% unemployment rate.
When unemployment rates are high and the economy is unable to absorb newcomers, supply and demand dictates that labour market will be favourable to employers, ie downward pressure on wages, with the surpluses going either to consumers, or the company/investors. Aside from some possibly lower prices for people in the middle and upper classes, and better returns in their portfolios (!), a reasonable economic argument for all of this can't be made 'in the name of freedom'.
[1] https://www.thelocal.it/20180612/immigration-to-italy-number...
The duty of a country is to its own people first.
But consider the opposite, a country that does not distinguish between its citizens and others. Can you call such a country 'yours', when it makes you compete with the world instead of protecting you from it? A friend to all is a friend to none.
>“They have been great,” he said of the newly hired workers. Still, he said, he lost about 1 million euros, about $1.1 million, in sales last year because he could not fill orders, most of them destined for export.
Multiply that across the whole economy and you're leaving a frightening amount of economic growth and tax revenue on the table. Providing subsidies and other support to encourage employers to hire disabled workers is unequivocally sensible; strangling the labour supply with ideologically-motivated controls on immigration is very much a mixed bag.
This is the standard claptrap we always here when there is a tight labor market and rising wages. Oh no, capitalists have to compete for workers! They might have to give them higher wages and better benefits in order to retain them! They might have to have an actually productive, profitable business to stay afloat. Oh noooo!
It should but in reality it doesn't. Corruption and crime in developing countries makes them less attractive to investment and migration, so migration only goes in 1 direction. Developing countries lose skilled workers and in western countries real wages go down.
For freedom to migrate to actually create greater efficiency, there would need to be no barriers to migrating to lower-cost areas (developing world), that way workers and small-business owners (and not just massive multinationals) could take advantage of lower costs in other countries.
Right now the situation is far from ideal, hence why you see anti-immigration movements in every western country.
More people means more customers. There are certainly places with the problems that come from over-crowding, but places that lose population tend not to be doing too well economically.
The question is whether and how to take all this into account in your cost-benefit calculation. It doesn't seem at all obvious to me, without actually doing the math. And certainly you can't trust the judgement of random people who don't know much about what's going on outside of their everyday lives (which is most of us).
Conclusion: this stuff is complicated. Simple answers aren't to be trusted.
It helps the people who migrate and their families, at the cost of the development of the nation they're leaving behind who lose skilled workers, and it also hurts those left behind in the country that aren't receiving remittances as the influx of foreign cash raises costs and prices.
> More people means more customers.
And more workers (putting downward pressure on wages). More customers offsets that slightly by increasing demand for products, but between the effects of increasing labour supply and cash leaving the country (those remittances you brought up), is it a net positive for both sides? There are losers, where's the equilibrium?
> The question is whether and how to take all this into account in your cost-benefit calculation. It doesn't seem at all obvious to me, without actually doing the math
Of course you take everything into account when doing the maths. The problem is that those who make decisions are swayed by corporations and lobbyists, so they optimise for what's best for corporations, not necessarily citizens.
> Conclusion: this stuff is complicated.
Very. I studied it in university, it doesn't get simpler the deeper you go. And the answer of 'migration is always positive' is a simple answer, and doesn't take into account the winners and losers.
It seems like you're still thinking zero-sum? Someone moving to a richer company could send back more money than they could have possibly earned if they stayed home, while also earning and spending even more in their new country. Total spending is higher in both places. There are extreme cases of immigrants who started companies (which creates jobs), became fabulously wealthy, and also helped the whole village back home. Or things could go badly, of course; I don't claim this is what usually happens.
Just figuring out the total effect of remittances seems rather difficult, considering effects on trade balance. Are imports good or bad? How about exports?
In general, it seems like more economic activity is good? But there exceptions.
It's weird to see low unemployment correlated instead with nationalism.
Why is it weird? Isn't it consistent with any historical period of mass migration?
Hungary is losing a ton of workers because everywhere West of it pays a lot more. This is the first order issue, not local politics.
Brexit would arguably be a rather nationalist form of action and the UK is a primary destination for Europeans, and others.
Like when some people are sickest they are most likely to turn to pseudoscience rather than the actual science they need.
> will not increase salaries
> confused about why no workers
> no one can figure it out
> nobel prize if you can figure it out
> let's write another story in the NYT about it
> baffling
Huh...
The article seems to contradict this...
Somehow the laws of supply and demand are well fitted to price products (produced by those holding capital) but not labor (produced by ordinary people)
It's ok to be mistaken about this, the way labor markets behave isn't very intuitive. The important thing to note is that the higher order effects of labor supply overwhelm the first order ones.
It sort of depends. You could argue that in the US there is a (artificially created) shortage of doctors, which makes them great money, while inflating everybody else's medical bills. So, if the labor shortage is experienced in an industry serving mostly for the local (US) and not the global market, it's not good for the people.
Good point. I was just referring to the common usage of the phrase. When media talks about "labor shortage" they usually don't mean doctors.
What is stopping govt/reps from fixing this? I don't think there is strong doctors lobby strong enough to oppose that.
Not that I need them as I have a job, but if their search / recruiting is garbage maybe not finding someone says more about their requirements / process than the market, meanwhile they don't hire even a noob.
But you're still right, the term is just framing. Like when the exchange rate or property prices go up or down, it's presented as either good or bad depending on their priorities.
The labor shortage has grown so acute that the government recently pushed through a contentious bill to address it. Widely referred to as the slave law, it allows employers to require up to 400 hours of overtime annually from its workers, while delaying compensation for up to three years. Mr. Orban’s Fidesz party promoted the measure as good for workers, saying it would let “those who want to work more earn more.”
In America, we call these "right-to-work" laws. To my knowledge, none have gone this far yet.
“In the context of U.S. labor politics, "right-to-work laws" refers to state laws that prohibit union security agreements between companies and labor unions. Under these laws, employees in unionized workplaces are banned from negotiating contracts which require all members who benefit from the union contract to contribute to the costs of union representation.”
The point of Right to Work is to prevent predatory unions from doing things like forcing people to pay dues to them or negotiating preferential treatment only to people who choose to pay dues. Or, say, go without pay during a strike when the worker may indeed rather be working.
Of course, this can be a problem because it reduces the collective bargaining power of unions if an employee can simply refuse to strike. But at the same time, it also forces unions to be providing real material value in exchange for their dues since they now have to convince workers that it is worth paying dues instead of being able to extract dues in a mandatory way.
You may be confusing what Right to Work is designed for with what opponents of it think will happen if union power is reduced.
Sounds like an effort to bankrupt the unions.
> I'm going to try to answer this without taking a side.
> predatory unions
Whoops ;-)
> Whoops ;-)
That's not taking sides. I didn't call all unions predatory. Regardless of how prevalent it is, it is most certainly possible for any organization to be predatory. I'm not claiming if that is 1% or 99%. Just stating that it is X% that Right to Work laws are trying to address.
Are you saying that it is impossible for people with power to abuse their power or that union leaders have no power over their members? To me there is a clear disparity in power between union leaders and union members. In fact that disparity is why unions exist because the same disparity exists between employer and employee.
I am puzzled about how you can find both of these predatory. You seem to think the only ethical thing for a union to do is to negotiate rates for everyone, but not require anything in exchange. The word for that is “charity”.
This is exactly like requiring insurance companies to accept everyone, including people with ore-existing conditions, but not make the counter-requirement that people get insurance.
However, people seem to be assuming what side I am on. I actually see it as OK for unions to negotiate for just their members. Pay dues if you want to enjoy the benefits of membership seems perfectly fine to me. I'm just listing that because that is one of the things Right to Work Laws try to do.
I was simply saying that the point of them is not to be able to force people to work 40 hours overtime or get fired. Like the law in this article seems to do and what the parent comment says is equivalent to right to work.
Though I will say that I do agree with the parts of Right to Work that makes it so the unions can't make membership a condition of employment or force you to go on strike.
Indeed. The fact that there are so many high-wage countries around Hungary is one of the reasons why it has this problem anyway.
Multinational companies bring factories to Hungary, because labor is cheap. If wages go up then I guess many of those factories pack up and move east for other countries with lower wages.
So wages should go up but then many jobs may disappear.
It’s just the markets at work mate.
The article is about a government putting up barriers preventing businesses from hiring workers. This is a regulatory barrier.