3 ms·

1) true, so they bought and created big supermarkets, factories and kept the salaries low, this did not help people on building wealth anywhere... 2) Privatisat

1) true, so they bought and created big supermarkets, factories and kept the salaries low, this did not help people on building wealth anywhere... 2) Privatisation is true - so you agree with me. 3) And? 4) New business? You mean old police informants with capital, investing in what was interesting for them...

pas 8y ago
Where do you think that GDP per capita growth came from? The economy benefited immensely from those factories and access to cheap stuff on international markets. Salaries are low because there is not enough high paying job, because there are not enough high-skilled workers to attract/fund businesses that would employ them. Furthermore, the Hungarian economy and demography suffers from the same problems as other developed economies. Technological improvements made a lot of mid-value jobs so efficient (via automation and of course through global institutions and multinational organizations), that the demand for them disappeared. See David Autor's seminal paper: https://economics.mit.edu/files/11563 https://economics.mit.edu/files/11563 (for example page 13, figure 2 is very telling. middle class jobs "disappeared"). Hungary, just as the US suffers from the problem of transforming labor markets (middle class jobs are hard to find, plus typical worker class male dominated fields are shrinking, whereas female dominated service oriented sectors are rising). And whereas in case of the US a lot of people are simply caught in a vicious cycle of poverty and incarceration, about two hundred thousand Hungarians left the country since 2010. (That of course did not help the active population ratio, though people working abroad send a lot of money back.) The education system is also regressing in the last 5-10 years, now the research institutions are in upheaval too, due to centralization and inefficient restructuring by the government. This will slowly swing back one way or another. The recent "overtime work hours" law is a good example, because it doesn't make much difference, as the labor market for low-skilled workers is in a gridlock. (A friend of mine works as a HR manager and they can't find enough local workers, so they recruit Ukrainian foreign workers, for a simple, but big warehouse, 1000+ workers.) And don't forget, wages will rise when labor share of profits increases, but that means more competition, less government protected oligarchs. Privatization resulted in a lot of foreign companies owning stuff, not commies and informants. Secret police driven businesses were not particularly successful even back then, they haven't accumulated much capital. There are bound to be some folks living off that, but investors in the early 90s were usually high income individuals. (Doctors, company directors, etc.) They got there during the 80s, which of course required the right party signals, but these people then sold stuff (real estate, companies, etc.) after its value appreciated to foreigners or the new guard. It's very unlikely that "everything [in Hungary] is still mostly owned by communists and police informants."
- mac_was 8y ago
  Not enough high skilled workers? That is simply not true, highly skilled workers earn good money (programmers, engineers, doctors), the problem is with low skilled ones, who earn 4-5 times less then in Western Europe. In every country you have lot more of low skilled than high skilled workers hence this is where the problem lies. There is absolutely no difference in how a shop assistant deals with clients in Hungary or Czech Rep. as in UK or US. So why the disparity? It is definitely not caused by skills, the prices of goods are the same (for sure not 4/5 times cheaper), so what is the problem? The foreign companies? Not enough powerful unions? Governments allowing that?
  - pas 8y ago
    > That is simply not true, You haven't disproved my claim, you introduced a different one (that high skilled workers earn good money). Hungary has fewer people that speak foreign languages (as percentage of working age population: https://scontent-vie1-1.xx.fbcdn.net/v/t31.0-8/18155924_886145261528283_4268866092537942220_o.jpg?_nc_cat=103&_nc_ht=scontent-vie1-1.xx&oh=c5a8db95817a706526fc900d4fcb197f&oe=5CB677CB https://scontent-vie1-1.xx.fbcdn.net/v/t31.0-8/18155924_8861... ) than any of the other EU member states. Hungary is the country where the ratio of graduates decreased among the 25-34 year olds between 2014 and 2017 (which might seem like a statistical fluke, but the problem is EU average is increasing monotonically since 2008, whereas Hungary had a peak in 2015 and declined since back to 30% vs 39% of EU average(!), see also: https://ec.europa.eu/eurostat/statistics-explained/index.php/Educational_attainment_statistics https://ec.europa.eu/eurostat/statistics-explained/index.php... 2017 ) This pretty much means Hungary has too few high-skilled workers. > In every country you have lot more of low skilled than high skilled workers hence this is where the problem lies. There is absolutely no difference in how a shop assistant deals with clients in Hungary or Czech Rep. as in UK or US. So why the disparity? And that's because economics works in the aggregate. Skills matter, because in Hungary you have too many people competing for those low skilled jobs. Think about what does the emptying of the middle class means. Of what the Autor paper means that I linked. A lot of people move down. The low skilled jobs are threatened not by automation, but by having more people suddenly becoming "low skilled" (because if they are not high skilled enough to count as high-skilled, and middle-skill stuff is disappearing, then more people are now forced to try to find low-skilled work jobs). https://qz.com/1010831/the-middle-skill-job-is-disappearing-in-rich-countries/ https://qz.com/1010831/the-middle-skill-job-is-disappearing-... Hungary lost both low and middle skilled jobs, high-skilled jobs grew. Yet Hungary has comparatively few high skilled workers. Hence those who are forced to work at "low skilled jobs" are now simply competing with each other more.

pas 8y ago

Where do you think that GDP per capita growth came from? The economy benefited immensely from those factories and access to cheap stuff on international markets. Salaries are low because there is not enough high paying job, because there are not enough high-skilled workers to attract/fund businesses that would employ them. Furthermore, the Hungarian economy and demography suffers from the same problems as other developed economies. Technological improvements made a lot of mid-value jobs so efficient (via automation and of course through global institutions and multinational organizations), that the demand for them disappeared. See David Autor's seminal paper: https://economics.mit.edu/files/11563 https://economics.mit.edu/files/11563 (for example page 13, figure 2 is very telling. middle class jobs "disappeared"). Hungary, just as the US suffers from the problem of transforming labor markets (middle class jobs are hard to find, plus typical worker class male dominated fields are shrinking, whereas female dominated service oriented sectors are rising). And whereas in case of the US a lot of people are simply caught in a vicious cycle of poverty and incarceration, about two hundred thousand Hungarians left the country since 2010. (That of course did not help the active population ratio, though people working abroad send a lot of money back.) The education system is also regressing in the last 5-10 years, now the research institutions are in upheaval too, due to centralization and inefficient restructuring by the government. This will slowly swing back one way or another. The recent "overtime work hours" law is a good example, because it doesn't make much difference, as the labor market for low-skilled workers is in a gridlock. (A friend of mine works as a HR manager and they can't find enough local workers, so they recruit Ukrainian foreign workers, for a simple, but big warehouse, 1000+ workers.) And don't forget, wages will rise when labor share of profits increases, but that means more competition, less government protected oligarchs. Privatization resulted in a lot of foreign companies owning stuff, not commies and informants. Secret police driven businesses were not particularly successful even back then, they haven't accumulated much capital. There are bound to be some folks living off that, but investors in the early 90s were usually high income individuals. (Doctors, company directors, etc.) They got there during the 80s, which of course required the right party signals, but these people then sold stuff (real estate, companies, etc.) after its value appreciated to foreigners or the new guard. It's very unlikely that "everything [in Hungary] is still mostly owned by communists and police informants."

mac_was 8y ago
Not enough high skilled workers? That is simply not true, highly skilled workers earn good money (programmers, engineers, doctors), the problem is with low skilled ones, who earn 4-5 times less then in Western Europe. In every country you have lot more of low skilled than high skilled workers hence this is where the problem lies. There is absolutely no difference in how a shop assistant deals with clients in Hungary or Czech Rep. as in UK or US. So why the disparity? It is definitely not caused by skills, the prices of goods are the same (for sure not 4/5 times cheaper), so what is the problem? The foreign companies? Not enough powerful unions? Governments allowing that?
- pas 8y ago
  > That is simply not true, You haven't disproved my claim, you introduced a different one (that high skilled workers earn good money). Hungary has fewer people that speak foreign languages (as percentage of working age population: https://scontent-vie1-1.xx.fbcdn.net/v/t31.0-8/18155924_886145261528283_4268866092537942220_o.jpg?_nc_cat=103&_nc_ht=scontent-vie1-1.xx&oh=c5a8db95817a706526fc900d4fcb197f&oe=5CB677CB https://scontent-vie1-1.xx.fbcdn.net/v/t31.0-8/18155924_8861... ) than any of the other EU member states. Hungary is the country where the ratio of graduates decreased among the 25-34 year olds between 2014 and 2017 (which might seem like a statistical fluke, but the problem is EU average is increasing monotonically since 2008, whereas Hungary had a peak in 2015 and declined since back to 30% vs 39% of EU average(!), see also: https://ec.europa.eu/eurostat/statistics-explained/index.php/Educational_attainment_statistics https://ec.europa.eu/eurostat/statistics-explained/index.php... 2017 ) This pretty much means Hungary has too few high-skilled workers. > In every country you have lot more of low skilled than high skilled workers hence this is where the problem lies. There is absolutely no difference in how a shop assistant deals with clients in Hungary or Czech Rep. as in UK or US. So why the disparity? And that's because economics works in the aggregate. Skills matter, because in Hungary you have too many people competing for those low skilled jobs. Think about what does the emptying of the middle class means. Of what the Autor paper means that I linked. A lot of people move down. The low skilled jobs are threatened not by automation, but by having more people suddenly becoming "low skilled" (because if they are not high skilled enough to count as high-skilled, and middle-skill stuff is disappearing, then more people are now forced to try to find low-skilled work jobs). https://qz.com/1010831/the-middle-skill-job-is-disappearing-in-rich-countries/ https://qz.com/1010831/the-middle-skill-job-is-disappearing-... Hungary lost both low and middle skilled jobs, high-skilled jobs grew. Yet Hungary has comparatively few high skilled workers. Hence those who are forced to work at "low skilled jobs" are now simply competing with each other more.