Income Gaps Have not Narrowed in the Past Decade

Despite economic growth, the concentration of income of the Hungarian population has remained virtually unchanged over the past 10 years, according to the Central Statistical Office.

In 2019 – as in 2010 –, the richest 10% had nearly a quarter (23%) of the total income of the population and the top 30% about half of the total income. Households in the bottom tenth owned only 3% of income and those in the bottom 30% owned 14%. Based on the economic growth of the last ten years, the government's family support measures and the European Union support programs, it was expected that the differences would decrease.

This is not how it happened, a study by the Budapest-based Economic Research Institute (GKI) has found. Rather, the data indicate that income disparities have actually been conserved. In reality, the situation is even worse, as the incomes of the fastest enriching strata are only partially included in the statistics (e.g. they were realized abroad).

All this also means that even at the peak of economic growth, more than two million Hungarian citizens had a monthly subsistence income of less than HUF 101,000 (or HUF 81,000 per month in the case of families with one child). While wages have risen by almost 100% in nominal terms since 2010, pensions have risen by only 33%, and social benefits rose almost nothing. Mainly because most of them are linked to the current minimum pension, which has remained unchanged at HUF 28,500 since 2010.

This means that the most vulnerable, retirees and those in need of social care, are moving further and further away from the rest. The main losers in the vision of a “work-based society” often emphasized by PM Viktor Orbán are from these groups, most of them slipping lower and lower in the income ladder after 40-50 years of work.