Differentiated cut in minimum wage can increase employment

03/12/2012

The national minimum wage has varied around 40 % of the average wage in Hungary in the past few years. However, in disadvantaged regions it has tended to be much higher, reaching 60 % of the local average wage.

Researchers of the Budapest Institute argue that cutting the minimum wage in such regions would help increase employment, once the business environment has been stabilised. A more detailed outline of the pros and cons of such a measure has been published in Hungarian in Munkaerőpiaci Tükör 2012, and will be availble in English soon.