picture of a town hall

24.hu writes that while many may be pleased at the planned 20% increase in the minimum wage in January, it is sure to cause headaches for certain employers such as municipalities, who don’t have extra money to spend.

According to the president of the National Association of Local Governments, raising the minimum wage in the public sector could results in wage tensions, because those who earn more than the minimum wage could legitimately expect a salary increase.

Jenő Schmidt told Inforádió that local governments are in a tough economic situation even without increasing salaries and cannot raise wages without additional resources. He feels that wages should be raised due to higher prices, but local governments will also need extra resources for this.

Schmidt claimed that the issue of managing local governments is complicated by the fact that the government receives all tax money that enters state coffers, meaning that local municipalities’ room to maneuver “converges to zero.”

Hungarian municipalities employ about 100,000 people in total.

[24.hu]

By Steven N.

Steven is the editor-in-chief of Hungarian Politics. He has been following the political scene in Hungary and the Central European region more or less since 1994.