Commentary

Scenes From a Crippling Labor Shortage

“I entered the hotel room and I found the head of accounting cleaning the bathtub.”

…said the manager of a five star hotel in downtown Budapest. There was no one working for housekeeping and the hotel management tried to bridge the labor gap themselves. For holidays, hotels are trying to barter housekeeping staff between each other to keep up with work.

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Image: Tumblr

“I asked him to hand me four eggs. He gave me two. He meant it! He cannot count to four and I have to keep him because there’s no one else to hire!”

…complained a chef about his new kitchen help.

“You have to slow walk them through what it means to have a job. You explain to them what it means to turn up for work on time. The next day he turns up only 10 minutes late and he demands a praise. The day after he doesn’t even bother to show up because he made such an effort the day before.”

…explained the owner of a gardening business.

“We couldn’t open on Wednesday because no one turned up to work in the kitchen. Not a single employee. And the worst thing about it? If they come back, I have to take them back.”

…explained the owner of our once-favorite restaurant when I complained about the food. It looked like a child put it together from frozen supermarket stuff. The restaurant was not in a remote village but in downtown Budapest. They were known to serve luxurious food – albeit at steep prices. But even that wasn’t high enough to pay salaries to compete with Austria. Restaurants at Balaton are on the verge of closing down every single day, and just in the town of Vác the following restaurants went out of business for labor shortage in the last few years.

In the processing and manufacturing industries (Orbán’s favorite in his vision for the country) the situation is equally dire. One car manufacturer complained that even after they automatized every job that was up for automation, they couldn’t find an employee for the simple job of sitting there and press a button when the machines malfunction. Not to troubleshoot, not engineering work – just to push the alert button. For full salary, healthcare, childcare support, generous vacation allowance, etc.

Yet another manufacturer explained that the available workforce is so unused to working at all, that teaching them the trade is the least of the issues.

“We used to give them training on how to operate machines. Now we train them how to handle their private lives so they don’t flip out on the job. A guy has a girlfriend problem, he comes in and picks a fight. I am losing my last competent people because they can’t handle the stress of working with the unfit newcomers.”

It doesn’t help that the economy is slipping into crony hands on every level. One storage manager complained that they used to have a 40-hour course on how to handle the forklifts for new employees. They had the right to issue certificates and they covered the cost for new employees and paid them salaries during the training. But one day the government issued a new regulation that increased the number of hours for the training to 300, and a local Fidesz man got the license to issue certificates – to no one’s surprise. “It would be insane to hire people and send them to training for ten weeks for a start, and pay for it,” said the owner. They are looking at ways to automatize their business, but only halfheartedly.

“In this political climate you never know what will be taken away next. This time it was our licensing rights. Next time it may be our business. So why invest so much – even if it would make business sense?”

Construction industry is suffering under the triple shock of labor shortage, bureaucratic paralysis, and these days even a shortage of concrete because the building of stadiums literally consumes 40% of the production of concrete (let alone workforce). There is a months-long waiting list for the simplest type of bricks and other building materials because capacities are held up in stadium constructions – cathedrals erected to Orbán’s little personal hobby. The government’s flashy push for more homes couldn’t materialize even if it were realistic.

In the healthcare, nurses cannot go home to sleep because there is no one to take the next shift and patients would almost certainly die. The only thing harder to come across at a hospital than a nurse is a doctor. Healthcare vegetates on the last drop of blood by the most committed and conscientious doctors and nurses while opportunistic and corrupt doctors thrive on the informal dual healthcare system and by pocketing semi-official bribes.

There are countless examples of a crippling labor shortage, even in the capital. Outside of Budapest, businesses close down every day for lack of staff. Restaurants simply can’t afford to charge as much as it would take to attract workforce – let alone competent workforce.

Adverts of businesses recruiting for every position circulate on the internet – as well as signs of local restaurants closing down for good. Family businesses run on self-exploitation for as long as they can – but without major price increases, they don’t have a chance to retain workforce.

But the purchasing power of Hungarians is abysmal. The middle class is non-existent (those who belong there statistically have trouble buying food and could not shoulder a medical emergency or a single month of unemployment) and purchasing power is further weakened by skyrocketing housing costs that don’t show up in inflation calculations.

And yet, even official inflation is about to take off – despite the best efforts of the subservient statistical office and the mathematically uninhibited central bank. With the end of easy money worldwide, small economies are bound to suffer. The only thing that has been “dirt cheap” in Hungary was labor, but even that reached a breaking point. It took a few years for the process to gain impetus, but once emigration reached a critical mass and everyone had a friend or two who left, it started to accelerate.

In this environment a kitchen hand or a housekeeper can command over 5 euros per hour (way above the industry normal), not to mention chefs and waiters – in exchange for very little effort and sub-par work. It doesn’t help that the government’s ‘workfare’ program – to employ unemployed people under the minimal wage to do token work to stay out of statistics – have left many participants unable to enter the private sector. They have been used to dig ditches and work on the mayors’ farm under the supervision of bureaucrats, they have neither the competence, nor the incentives to start doing real work for real wages.

Higher earners, in the meantime, are not enjoying the earning benefits of a labor shortage. Wages in better-paid positions and the administrative sector are still stagnating, while managers find themselves lured into better paid freelance work.

Anecdotal evidence supports what is also my own experience that managers and executives find better paid freelance work abroad and increasingly opt to leave their jobs. Less and more flexible working hours, no managerial burden and less responsibility is paired with more fulfilling work, life-work balance and better income.

This should be the most burning issue for Eastern European policymakers, not the non-existent immigration pressure.

Yet, the oppositions are too corrupt and incompetent to keep the topic on the agenda – even on the last few communication channels that remained for them. They are reduced to reacting to Orbán’s inane migrant-bashing and denying his accusations. Sometimes I feel they are really just that stupid. Counter-selection, after all, doesn’t only affect the workforce. Politicians who are left behind are also the ones who couldn’t make it elsewhere…

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