Shadow unemployment in Europe is a big problem, the real figure may be much higher than the official figure. Many people only work part-time, temporarily or attend courses. But is the situation better in Hungary? Can you name someone who does not have a job, but is not yet registered as unemployed?
Shadow unemployment is a big problem, a real dilemma, according to Daniel Lacalle, an economist and writer and book author, in Europe, although to a lesser extent in the USA as well. The situation is much worse in the European Union. The UBS banking group showed in its Economic Outlook or Europe 2023-24 report that there is a significant difference between official unemployment and real, hidden unemployment in the euro area. The official unemployment rate in the euro area is still high at 6.5 percent.
They are not working, but they are not unemployed
The highest unemployment rate is in Spain, around 12.5 percent, followed by Greece with 11.4 percent and Italy with 7.8 percent. However, according to UBS, shadow unemployment in the euro area is 8.8 percent, in Spain 15 percent, in Italy 8 percent, and in Germany well above 5 percent, compared to the official three percent.
Unemployed workers are left out of the official unemployment rate in different ways in European countries. Those who do not work but are in training, mini-jobs and those who have a long-term contract but only work for a few months are subtracted from the numbers. Or they were forcibly released. They do not appear as unemployed, even if they receive unemployment benefits.
Is the public burden of work the same for the Greeks as it is for us?
According to the author, all this shows the flaws of strong state interventions and the rigid labor market. The first source of rigidity is labor costs. High social security contributions and taxes make it difficult for businesses to reduce unemployment. The tax burden on labor is very high in countries such as Spain or Greece, where a company pays almost 1,800 euros for an employee to receive a net salary of 1,000 euros.
In Hungary, for a gross salary of 400 thousand forints a according to calculators 478 1,000 forints are owed in salary costs, of which the employee receives 266,000 HUF. Since 478/266=1,796, this is almost exactly the same case as the Spanish-Greek example above.
Millions are left on the side of the road
If we add regulatory, administrative burdens and penalties to this high tax wedge, it turns out that the system meant to protect workers actually leaves millions on the side of the road, especially young people, writes the Spanish economist. Important barriers to reducing unemployment include very high direct and indirect corporate taxes, as well as language and cultural barriers.
During the Covid-19 crisis, in April 2020, shadow unemployment rose to 21.7 percent in the EU and 14.7 percent in the United States. In the USA, the reopening was associated with faster wage growth, but in the euro area it remained weak. While the real wage in the United States decreased by 1.1 percent, it decreased by 6.8 percent in the euro area (in the third quarter of 2022). The author attributes the negative trend seen in Europe to the ever-increasing state intervention in the economy.
Az Lives in the United StatesShe my friends should take note that hthey copy the European economic policy, then they get European unemployment and real wage levels he added.
What is Hungarian shadow unemployment?
If someone hears that unemployment in Hungary is only 3.8 percent (KSH, November data), then it is also common to shake your head in disbelief. Especially in the countryside, in poorer districts. Many people feel that the unemployment rate does not reflect reality. Who are the Hungarian shadow unemployed and what do they do? Several cases are possible:
- Only hunemployment benefit for a month following that, if they do not apply, are automatically removed from the systemShel. (And the average placement time is much longer, usually around nine months.)
- Many trainingIare involved in
- Others public works program, which is almost impossible to make a living from.
- Sok the black one is busy. (It’s not necessarily their own fault, it’s because they wouldn’t get a job otherwise.)
- There are some who forced bShel works abroadnak, often only with a seasonal character or also in black.
According to the non-representative consultation of our small editorial staff, everyone can give several examples from their own environment.
A guy sometimes helps my dad as a casual worker, aki he is not officially unemployed, because he has been employed for a few days, in addition, he sweeps the streets and parks in the summer and is already out of the systemShel. But he doesn’t have a normal job – said one of our colleagues.
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