Migration, labour shortages, guest workers

The issue of labor shortages has increasingly surfaced in Hungary, with concerns that reserves have been depleted and that labor scarcity now acts as a constraint on production. Public discourse largely attributes this situation to emigration, while the government seeks to expand available resources. But what does labor shortage truly mean? This question was examined in detail during the period of its intensification in the chapter Close-up of the Labor Market Review 2016 (edited by Köllő, 2017). Köllő and his co-authors (2017) emphasize that labor shortages can only be understood in relation to prevailing wage levels, a clarification that renders the concept relative. They highlight that references to labor shortages are often driven by vested interests and may be more accurately interpreted as complaints.

It may be the case that demand exceeds supply at existing wage levels, while price adjustments and/or labor mobility are hindered by various constraints. Alternatively, the supply of available workers may be increasing at a slower pace than the demand for labor at recent wage levels, or policymakers may deem the supply of a particular type of labor insufficient for achieving important societal objectives. Naturally, different forms of labor shortages can be categorized based on the criteria outlined above and tied to specific periods. However, in every instance, the situation must be assessed within the framework of prevailing wages.

Emigration, too, can be interpreted within this context. In a previous study published in the Social Report 2016, Hárs (2016) pointed out that despite a tightening labor market, increasing emigration had no discernible effect on wage dynamics in Hungary. A comparative study based on the database of the Wiener Institut für Internationale Wirtschaftsvergleiche (WIIW) (Astrov et al., 2021) examines labor market shortages across the Central and Eastern European region. While notable similarities exist, the study also highlights significant divergences in Hungarian labor market trends and perceptions of labor shortages.

Since the mid-2010s, labor shortages in Hungary have appeared substantial and persistent across multiple indicators. A company may perceive its operations as constrained by the absence of just one or a handful of workers—relative to prevailing wages. Corporate survey-based indicators measuring labor shortages in Hungary were already exceptionally high in 2014, surpassing the EU27 average and those of other countries in the region.