Commentary

The 40+8 hour workweek

This is what you get if you let the state interfere in your employment conditions in the hope that it will take your side. 

The term Communist Saturdays refer to unpaid “voluntary” extra work done for the Communist Party. On these Saturdays and public holidays people “voluntarily” turned up for work “to build Communism” – and if you think you certainly wouldn’t have done it, you don’t understand the first thing about authoritarianism. The barrage of quote marks in the above description is no accident – everything was fake and feigned under communism, work, the economy, your opinion, and especially voluntarism.

Everyone in Hungary was suddenly reminded of communist Saturdays last week when the new labor law (commonly dubbed as “slave law”) was presented to parliament for rapid approval.

40+8 hour workweek

A new law is being pushed through Parliament at a record speed (as usual) increasing the upper limit of overtime an employer can ask for to 400 hours a year. That’s 40+8 hours per week, which either means 10-hour workdays four days a week or a full Saturday. The change affects employers of 15+, and the bigger they are, the less role there is for the unions to consent. The 400 hours are, however, not calculated evenly – they have to average that much over 3 years.

The current upper limit is 250 hours, annually calculated. The extension of the calculation period doesn’t just hurt employees because it allows employers to withhold salaries, but because it will decrease their mobility – another deep-seated desire of employers.

UPDATE: After the uproar, the government did what it always does: made it even more disadvantageous for employees. (That’s how authoritarians teach their victims a lesson, they never give in.) Now it appears that employees wouldn’t even have to pay overtime fro the 400 extra hours. 

German carmakers are a big deal for the Hungarian economy. When Audi paused production for a few weeks in the summer of 2016 to rearrange the production line for a new model, the Hungarian economy dipped by almost 1%, and July industrial production fell by 4.7%. That’s how exposed we are.

And when German carmakers find it hard to recruit and retain people, the government will draw blood to please them. Employees’ blood, to be precise.

The government may be regularly acting like a bunch of omnicompetent economic gods, messing with the economy with the force of the law, but they can’t produce more workforce. Labor shortage is so severe that it affects production, services, construction, education, healthcare – on every education level and in every profession. (The only thing we don’t have a shortage of is politicians and oligarchs.)

A major reason is record emigration. Since 2011, up 10% of the population (and a much higher share of the labor force) had left the country to seek decently paid employment elsewhere in the European Union. Wages have been stagnant for a decade, gaining too little too late when the severe shortage of labor hit the headlines. Today, finding a non-disappointing employee is next to impossible, and even the disappointing ones can demand higher wages. Higher than allowed by profit margins, not high enough to actually live a middle class life on. Many family businesses choose to close shop – not because of lack of demand, but because of lack of labor. There is only so much work you can squeeze out of your own family. And bigger employers – such as carmakers – have it even worse. No amount of robotization can keep up with emigration, it’s not even a money issue anymore.

Low wages are not only employers’ fault. Both wages and companies are hit with record taxation – no matter what the government propaganda tells abroad. The tax wedge on personal income is just shy of 50%, despite the deafening government propaganda abroad highlighting the 15% personal income tax (and forgetting to mention the dozens of other taxes hitting earnings). We pay 27% VAT on pretty much everything. Corporate income tax is similarly sneaky, offering a shiny, low headline rate – and adding dozens of other taxes on top of it, carefully designed to be impossible to compare with other countries. And then comes the hostile bureaucracy and the tax office which is often used as a political tool. (And if you think your business has nothing to do with politics – you are wrong. There will always be a local Party member, seeking some extortion and quick money, and you are dependent on them for your rental space, your permits, and to not ruin your business altogether.)

Naturally, unions are outraged by the unilateral increase of the overtime limit, but they have little negotiating power. They are slavish and often corrupt, sitting in comfy positions thanks to the laws that created and protect them. Their only function has always been to legitimize decisions – and if they can’t do so this time, too bad. But it doesn’t change a thing.

They are planning a demonstration for the 8th of December, but they will eventually go home, like everyone always does, and nothing will be achieved. It is the mantra of the political elite that protesters “will go home”, meaning that even the most active expression of public opinion is toothless against them. The Fidesz political class leveled up in this as well, actively creating outrage (and thus protests) over irrelevant issues – only to teach the peasants that nothing can be achieved by protests. Orbán is an autocrat and a strongman cannot be shamed into compromises by protests – he would lose everything the moment he yielded, even in the slightest of things.

Opposition parties are gutted, dispirited and corrupted. They couldn’t and wouldn’t want to win, and they don’t even have an ideology to mindlessly cling to. But even they seem to remember that labor issues are a thing of the left so they staged some fight in parliament. Not because they can block the law, nothing can block Orbán’s new supermajority. But because it safely fits their duty to oppose things.

This time, however, they weren’t allowed to even verbally grandstand in parliament. The chair of the house simply muted their microphones. It is a telling sign. The Fidesz juggernaut didn’t just let the opposition MPs vent their anger. They actually bothered to silence them, refusing to even pretend that there is a parliamentary debate. Their tolerance for even the pretense of an opposition is running low.

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