
Businesses are scrambling for workers in Hungary - onetimemanytime
https://www.nytimes.com/2019/05/03/business/hungary-slave-law.html
======
rayiner
This article wildly misrepresents Hungary’s new overtime law. The article
makes it seem like employers can demand workers to work 400 hours of overtime
and not pay them until 3 years later. The fact that it talks about the
“perception” of the law rather than the actual legal provisions is telling.
Here is what the law does:
[https://www.twobirds.com/en/news/articles/2019/hungary/new-c...](https://www.twobirds.com/en/news/articles/2019/hungary/new-
controversial-rules-on-overtime-and-reference-period-in-hungary).

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.)

~~~
metafex
Yes, the employers can and will try to pay out the overtime only after that
time. And some are already trying to do just that. There have been large
protests which the state media doesn't even cover at all and honestly, calling
this propaganda is quite dishonest. Also workers are being "convinced" to sign
agreements because otherwise they are out of a job.

Source: Austrian with Hungarian partner, and with friends in Hungary.

~~~
rayiner
Under the law, overtime hours may not be counted as overtime until a
calculation is done over the full reference period. But the article makes it
seem like employers can get away with not paying the base wage for those extra
hours until three years later. That is false.

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.

~~~
metafex
Not all workers have a union. And the current trend in Hungary is to take away
more and more workers rights. A law is quite toothless if it's not implemented
that way.

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)

~~~
rayiner
> Not all workers have a union.

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.

------
negamax
The article gave the vibe that Hungary is economically doing well despite anti
immigration stance. But young Hungarians leave the country in droves. They
have fairly low GDP for EU. Just trying to understand if being nationalist is
helping them economically at all or it’s just feel good, shut eyes to reality
thing

~~~
dmortin
The anti immigration thing is a political ploy by Orban, so he gets less
informed people vote for him. He built a media propaganda machine which
hammers the dangers of migrants day and night. Any kind of criticism against
the government is deflected with the migration argument (those who criticize
only want to bring in migrants), regardless of the current issue.

------
javagram
This is a very interesting article. It shows both the benefits and the
downside of this type of policy.

> 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.

~~~
Mikeb85
> 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.

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.

~~~
skybrian
Migration greatly helps the people who migrate, more than other forms of
foreign aid. It also helps their relatives back home due to remittances. It
also increases demand for services in the country they move to (not just
supply of workers).

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.

~~~
Mikeb85
> Migration greatly helps the people who migrate, more than other forms of
> foreign aid. It also helps their relatives back home due to remittances.

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.

~~~
skybrian
Well, we agree things are complicated. "Migration is always positive" isn't
what I was claiming, just adding some factors on the positive side that you
left out.

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.

~~~
Mikeb85
One of the issues is that even if it causes a net positive, if a minority of
people are disproportionately hurt by it, is that worthwhile? Democracy is
about respect for those in the minority, not just what's good for the
majority.

------
brownbat
In "The Next 100 Years," Friedman predicted that globally declining birth
rates would lead states to start fighting to attract immigrants. That book is
full of incorrect predictions that are nonetheless interesting.

It's weird to see low unemployment correlated instead with nationalism.

~~~
hayksaakian
>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?

~~~
sonnyblarney
It's not weird because I suggest there's no correlation.

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.

------
jellicle
> pays minimum wage: 5500 euros per year (USD $6100)

> 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

------
4ntonius8lock
It always amazes me that the same people who want the law of supply and demand
to rule the costs of goods, housing and other things they control, are all of
a sudden unable to deal with the law of supply and demand when it comes to
labor... something they have to buy.

Huh...

~~~
hhffrgh
Fidesz isn’t the Republican Party. They aren’t advocating free market too
much.

------
thrwaway190504
Can someone clarify: the Hungary is in the EU, isn't it, meaning a single
labor market? (Any EU citizen can start working without issue.)

The article seems to contradict this...

------
perfunctory
"Labor Shortage" is just another example of framing. The word shortage
suggests a problem. While there is no problem at all. "Labor Shortage" is
actually very good for the majority of the population. I enjoy the shortage of
software developers every day of my life. It's great.

~~~
badpun
> "Labor Shortage" is actually very good for the majority of the population.

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.

~~~
dominotw
> You could argue that in the US there is a (artificially created) shortage of
> doctors

What is stopping govt/reps from fixing this? I don't think there is strong
doctors lobby strong enough to oppose that.

~~~
danharaj
The AMA is very powerful

------
klenwell
_Those workers have yet to show up. And hundreds of thousands of young
Hungarians who left in recent years for better-paying jobs in Europe’s big
cities are not heeding Mr. Orban’s call to return and serve their homeland.

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.

[https://en.wikipedia.org/wiki/Right-to-
work_law](https://en.wikipedia.org/wiki/Right-to-work_law)

~~~
throwaway2016a
This very much misrepresents Right to Work. I'm going to try to answer this
without taking a side...

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.

~~~
rootusrootus
> preferential treatment only to people who choose to pay dues

Sounds like an effort to bankrupt the unions.

> I'm going to try to answer this without taking a side.

> predatory unions

Whoops ;-)

~~~
throwaway2016a
>> > predatory unions

> 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.

~~~
danharaj
You say the law is intended to target predatory unions but its actual effect
targets all unions. The purpose of a system is what it does.

------
mnm1
I bet there would be no shortages of workers if wages went up. But of course
when the free market favors the workers, it must be regulated away. When the
market favors employers, it's working as expected. The situation is the same
here in the US. Idiot leader, massive corruption, economy growing, and labor
"shortages." I wonder how long this condition will last before it collapses
due to stupid, hateful policies. It won't be long now.

~~~
dmortin
> I bet there would be no shortages of workers if wages went up.

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.

~~~
Jorge1o1
And thus the labor shortage ends. Less jobs, higher wages.

It’s just the markets at work mate.

