standard of living

Increasing poverty in Hungary

It was only a couple of days ago that I mentioned MSZP’s complaint that the data on the number of people living at the subsistence level and below the subsistence level (in poverty) in Hungary still hadn’t been released. One of the MSZP politicians whose expertise is social welfare issues claimed that the report was ready to be published at the beginning of May but that the government put pressure on the Central Statistical Office (KSH or Központi Statisztikai Hivatal) not to release it at that time. Well, at last the figures are out together with an indignant denial of MSZP’s accusations. Yes, said the press release, normally the figures are published before July 1, but this year because of the work that had to be invested in the census–which by the way was also late–KSH was a bit behind.

Before we go into the details of the figures and what they mean, let’s go back a bit in time. In early 2012 Zsuzsa Ferge, a well-known sociologist whose main field of interest is the Hungarian poor, predicted that if the trend of the last few years continues the number of people who live at the subsistence level will reach 4 million by the end of 2012. The trend was definitely moving toward growing poverty. In 2000 there were only 3 million people who were living at the subsistence level; by 2005, 3.2 million; and by 2010, 3.7 million. That was 37% of the population. Today’s figure is, as Ferge predicted, a shocking 40%.

The growing number of poor people (and here I use the term “poor” loosely to include both those living at the subsistence level and those living beneath it) come mainly from the ranks of the middle class–teachers, nurses, and other low-paid workers. The Orbán government’s social policy clearly favors those who belong to the top income bracket. Sociologist Balázs Krémer also wrote a study published alongside that of Ferge in which he demonstrated how the rich are getting richer while the poor are becoming poorer in Hungary. Between 2009 and 2010 per capita income grew on average from 910,000 to 940,000 forints per annum. However, during the same period the incomes of the poorest 10% decreased by 12,000. The top 10%, on the other hand, became 98,000 forints richer and later, when the Orbán government changed the tax law,  they saw their income grow by 314,000 forints per year.

Központi Statisztikai Hivatal, subsistence statistics per household

Központi Statisztikai Hivatal, subsistence statistics per household

According to KSH estimates, a family of four (two working adults and two children) need a minimum of 249,284 forints to maintain themselves on a subsistence level. That means 62,421 per person. A single-person household needs at least 86,000 and a two-person household 150,400 forints. KSH’s table is self-explanatory with the possible exception of  the last three items that refer to pensioners, living alone or with one or two others.

In Hungary 60% of the family income goes for food and shelter. For comparison here are a few figures from the United States. Shelter is a large chunk of the family income here too. About the same as in Hungary or a little more (34%), but an American family spends only 12% of their income on food as opposed to 31% in Hungary.

In addition to the 4 million people in Hungary who live at the subsistence level there are 1,3800,00 people who live below it. That number constitutes 13.8% of the population. So only 46% of the Hungarian population live above the subsistence level.

It’s no wonder that more and more people are seeking a new life abroad. Mostly in Germany and the United Kingdom. Last year Tárki estimated that about 20% of the adult population planned to leave the country. Since then these numbers have only grown. According to some recent polls, half of all high school and university students are contemplating leaving Hungary. Naturally, it is a lot easier to talk than to act. Most of these people will end up staying at home, but the numbers are still very high.

A few months ago György Matolcsy referred to the half a million Hungarians who live and work outside the country. He didn’t give any source, but journalists figured that he must have based his numbers on some statistics that were available only to government insiders. Now we have an official figure from KSH that accounts for part of this “diaspora”: 350,000 people still have a permanent address in Hungary but have been working abroad for some time. Most of these individuals, I suspect, are young people who are still registered as part of the family household.

This brings up an interesting point about the way that KSH calculates its employment statistics. KSH includes among the employed even those who actually work abroad, including the 350,000 people we are talking about here. KSH inquires whether József Kovács, who is living abroad, has a job; if so (and presumably if he’s in another country he is gainfully employed), he is counted among the Hungarian employed. If KSH didn’t include these people in their statistics, the Hungarian unemployment figures would be significantly higher.

Hungary has seen modest employment gains in the public sector due to the public works program.  But the salaries that workers in this program receive are way below the official minimum wage and are only about half the subsistence level for an individual. (And since only one member of a family is eligible for public works, he’s earning less than 20% of what a family of four would need to subsist on.) Yesterday Zoltán Kovács, undersecretary in charge of the public works program, refused to answer Olga Kálmán’s question as to whether 43,000 forints, the salary of a full-time (40 hours per week) public worker, is enough to live on. The interview is already available on YouTube.

Given the economic realities in today’s Hungary, I don’t expect any improvement in the living standards of Hungarians in the near future. And I think we should anticipate an even higher emigration rate, for both economic and political reasons.

A public opinion survey about János Kádár and the Kádár regime from 1989

A couple of weeks ago I wrote a post on public opinion research in the Kádár regime. There was little reader response to it, most likely because a few hours later on the same day I published the speeches of Péter Feldmájer and Ronald S. Lauder at the Plenary Assembly of the World Jewish Congress in Budapest. I suggest that you take a look at it because today I’m returning to the subject.

If I were living in Budapest I would have access to the Open Society Archives at the Central European University where these old  public opinion poll results are stored. But since I don’t live there I have to rely on a summary of one of these sociological studies that appeared in Origo. The study is from 1989; it seeks to understand the reasons for the popularity of the Kádár regime. The Origo journalist picked this particular year because by then, very close to the anticipated regime change, people had little reason to worry about any possible consequences of their answers.

As a point of reference, in 2001 53% of Hungarian adults thought that the years between World War II and the change of regime in 1989 were the happiest time in Hungarian history. By 2008 62% thought so.

According to a study right after the death of János Kádár (July 1989), 50-60% of adults judged Kádár’s role in Hungarian history in a positive light. Moreover, this was the opinion not only of people with minimal educational attainment but of highly educated people as well. When asked what they liked about Kádár they pointed to his modest, puritanic lifestyle and his informality. 87% declared that their impression of him was always positive. They considered him “one of the great benefactors of the Hungarian people” and “the greatest personality in Hungarian politics.”

What did people appreciate in the old regime? That education and health care were “free” and that the state provided pensions for everybody. People insisted that all these benefits should remain even after the regime change “despite the demand for a multi-party system and a market economy.”

Fortepan 1985

Photo of new prefab houses in Budapest, 1985 / Fortepan.hu

The respondents appreciated the steadily rising living standards, especially noticeable in the 1970s after the introduction of the 1968 economic reform (New Economic Mechanism). In 1987 the sociologists asked people what conveniences they expected to be part of their everyday lives. Well over 90% of the population took it for granted that they would have bathrooms, ready hot water, and a refrigerator. 71% lived in apartments with central heating; almost 60% had automatic washing machines and record players and took family holidays. But only 44% of the families had a car or a colored television set. And getting a telephone line was close to impossible. Only 37% of the families had telephones.

When the Horn government was forced to introduce an austerity program in 1995 (the so-called Bokros-csomag, named after Lajos Bokros, minister of finance) it cost the socialists dearly. In 1998 they lost the election. Viktor Orbán, the new prime minister, promptly announced that every family should have “three rooms, three children, and four wheels,” meaning a car. He was appealing to the Hungarian yearning for a better, more comfortable life.

The later Kádár years were marked by an understanding between the rulers and the ruled. MSZMP and the state would leave the population more or less alone; in exchange for that privilege, the population would give up its ability to exercise political rights. “This compromise for twenty years was a success,” the authors of the study concluded.

In December 1989, that is, after the establishment of the Third Republic on October 23, the team of sociologists asked the respondents what issues would determine which political party they would vote for. They had to list these issues in order of importance. This is the list the group as a whole ended up with: (1) living standards, (2) freedom, (3) independence,(4) democracy, (5) equality, (6) socialism, and (7) capitalism.

The compromise between the rulers and the ruled in the Kádár era made a lasting impression on the Hungarian population. Nostalgia for the Kádár regime is not only growing among those who experienced it firsthand but is being “inherited” by those who were either small children before 1990 or not even born by then. And their priorities are not all that different from the priorities of the respondents in 1989.

Freedom was never the centerpiece of their demands. That pretty well explains the fact that, although the current government has severely limited the democratic rights of the people, there is no great resistance. Fidesz’s popularity in the last two years or so hasn’t dropped  all that much. But if the Orbán government is unable to raise living standards it might find itself in trouble. And if people wake up to the widespread corruption and visible signs of ill-gotten wealth, there might be a change in public sentiment. Kádár won the hearts and minds of the people in part by not being ostentatious. So, if I were Viktor Orbán I might dial back some of those projects that set the prime minister and his coterie of friends apart from the rest of the population. A private football stadium might be too much. Or those tobacconist shops that can make families millionaires. The “have-nots” rarely believe that the “haves” deserve all their toys.

If the economy doesn’t turn around, there will be nothing to give to those who expect a visible improvement in their standard of living.  Then we might see a change in the present acceptance of Viktor Orbán’s growing dictatorial governing style. The question is when the patience of the Hungarians with their mindset inherited from the Kádár regime will run out.