Part I — Situation overview

On 19 October, in his speech to Parliament presenting the main figures of the 2027 budget, Prime Minister Péter Magyar announced sectoral pay rises. According to Portfolio, state healthcare will receive 510 billion forints in additional funding, of which 192 billion forints goes to the pay of healthcare professionals, an average rise of 17 per cent. According to Telex, the pay of social care workers will rise by 17.8 per cent on average, and that of workers in public collections, libraries and community culture by 10.7 per cent. On the same day Interior Minister Gábor Pósfai said that in the interior sector the rise from 1 January will average 15 per cent: 13 per cent in the higher pay bands of the uniformed staff, and over 20 per cent in the lower ones (24.hu). The interest representation bodies protested at once. According to the Hungarian Chamber of Healthcare Professionals (MESZK), a smaller share than promised goes to pay, and later. The Trade Union of Public Collection and Community Culture Workers (KKDSZ) called the 10.7 per cent “a slap in the face”, and held a demonstration in front of the Prime Minister’s Office that same day.

On Tuesday, 20 October, the Permanent Consultation Forum of the Business Sector and the Government (VKF), the wage-bargaining forum of employers, trade unions and the government, meets. According to 24.hu, specific minimum wage percentages will be put on the table here for the first time. The three-year wage agreement concluded in November 2024 prescribed a 14 per cent rise for 2027. According to Portfolio, one of the major employers’ organisations proposes a rise of 4 per cent, the other a rise below 6 per cent. They argue that the personal income tax (SZJA) on the minimum wage will fall to 9 per cent next year, so net pay will rise even with a smaller gross increase. On 31 August MIAK already proposed a single public service pay timetable and rule-based indexation, and on 6 September retention indicators for the healthcare pay settlement. This analysis does not repeat them.

The announcement has exposed two new problems. The first is the blurring of gross and net. At the culture-sector demonstration, minutes were spent clarifying whether the 10.7 per cent includes the effect of the tax cut. In the minimum wage bargain, employers would count the same tax cut in place of a gross rise. The second is the compression of the pay scale: if the minimum wage and the guaranteed minimum wage rise faster than the pay of graduate jobs, the difference disappears. In MIAK’s reading, the real stake of the current pay dispute is not the level of the percentages, but whether everyone understands the same number in the same way, and whether higher qualifications are also reflected in pay.

Part II — Grounding in the literature

Three sources provide a framework for interpreting the two problems. The 2024 study of the European Observatory on Health Systems and Policies (Jeurissen and co-authors) examines the relationship between inflation and healthcare pay. It presents the Austrian practice, where the starting point of wage bargaining is inflation, plus or minus the change in economy-wide productivity. According to the study, where there is no such rule, pay catches up through protests. The Hungarian sectoral pay dispute shows exactly this pattern. Susan Rose-Ackerman (American lawyer and economist, one of the leading researchers of the political economy of corruption), writing on public service pay reform in her book Corruption and Government, warns of two phenomena. One is the compression of pay scales, which makes it hard to retain skilled staff. The other is that remuneration must be judged on the basis of the whole benefits package, not the base pay alone. The European Commission’s European Pillar of Social Rights Action Plan regards adequate wages and social dialogue as the foundation of EU social policy. It also asks authorities to consult the social partners when designing policies. The detailed discussion of the literature — by author, with quotations — is in section 6.4 Literature in detail.

Part III — MIAK’s concrete proposal

MIAK proposes three measurable steps. The first makes the already announced figures unambiguous, the second measures a hidden distortion, and the third fixes the starting point of the minimum wage bargain.

3.1 A sectoral pay matrix: the gross rise and the tax effect on separate lines (by the submission of the 2027 budget bill)

Since the announcement it has become clear in three sectors that workers do not know what they will get. According to MESZK, it is not known in which month the rise takes effect, or how the 17 per cent is distributed across jobs and experience levels. At the demonstration the president of KKDSZ still understood that the tax relief was included in the 10.7 per cent. The state secretary for public administration and the minister refuted this on the spot (Magyar Nemzet). MIAK proposes that the Government publish a sectoral pay matrix as an annex to the 2027 budget bill. For every affected sector (healthcare professionals, social care, law enforcement, public collections and community culture, and sectors announced later) it would contain five data items: the number of staff affected, the amount earmarked for pay, the average gross rise, the month of entry into force, and the distribution of the rise by pay band. In a separate column, apart from the gross figure, the estimated net effect of the SZJA cut should be shown at typical pay levels. According to Rose-Ackerman’s argument (see 6.4.2), remuneration must be judged on the basis of the whole package, so the tax effect should be neither hidden nor merged into pay: it should be visible, but separate. The matrix is a shared tool of KI6, a competitive public service pay system, and G1, a data-driven budget. The August pay timetable proposal was about future target pay; this one is about the content of the rises already announced.

3.2 A compression indicator: the ratio of graduate pay to the guaranteed minimum wage by sector (first publication by 31 March 2027, annually thereafter)

According to a study presented at an event of the Hungarian Economic Association and reported by Portfolio, the base of the public employee pay scale is driven by the minimum wage and the guaranteed minimum wage (the mandatory lowest pay for jobs requiring at least secondary education or vocational qualifications). Meanwhile the civil service salary base has been unchanged at 38,650 forints since 2008. So if the lowest wages rise faster than the sectoral rise, graduate pay sticks to the wage minimum. The examples heard at the demonstration show this: according to Magyar Nemzet, an archivist with a doctorate earns 349 thousand forints net, and a senior museologist with thirty years of service 412 thousand forints net. MIAK proposes that a compression indicator be compiled every year from the data of the Hungarian Central Statistical Office (KSH) and the public service personnel register. For each sector it should show how many times the guaranteed minimum wage a new entrant with a university degree and a colleague with ten years of service earn. The rule: if the ratio falls from one year to the next, the Government must publicly justify this in the next budget bill and name the pace of correction. MIAK does not prescribe a threshold, but it does prescribe a duty to justify a decline. According to Rose-Ackerman (see 6.4.2), a compressed pay scale is one of the main causes of losing skilled staff. This is the measurement condition of programme point KI6; on the data side it can be served by the FO1 employment data platform.

3.3 Minimum wage: inflation plus productivity as the starting point, with the tax cut accounted for separately (written agreement by 15 December 2026)

Fulfilment of the three-year agreement was tied to three indicators: growth of gross domestic product (GDP), growth of average pay, and inflation. According to the president of the Hungarian Trade Union Confederation (MASZSZ), on these grounds 12 per cent would be due instead of 14, whereas the employers’ side says that even under the letter of the agreement the figure has to be renegotiated (Magyar Nemzet). MIAK proposes three steps to the VKF. First: the parties should record in writing, with the actual values of the three conditional indicators, why and by how much they depart from the 2024 agreement. Second: the starting point of the negotiation should be expected inflation (the government assumes 3 per cent) and the expected improvement in productivity. A catch-up element can be built on this, bringing the minimum wage closer to a set proportion of gross average earnings. This is a Hungarian adaptation of the Austrian wage-bargaining practice (see 6.4.1). Third: the Ministry of Finance should publish a three-column table for every option under negotiation (4, 6, 12 and 14 per cent). It would show the gross rise, the net change at the 9 per cent SZJA rate, and the change in the employer’s total wage cost. This shows how much the employer contributes and how much the state, and the tax cut does not become a hidden substitute for a gross rise. The table should be accompanied by the expected path of unit labour cost (wage cost per unit of output), because for euro adoption this shows how much wage growth price stability can bear. The proposal is the procedural core of programme points FO10 and G18.

The three proposals are linked by a common principle: the pay dispute can only be closed if the parties argue about the same number. Today the worker talks in gross, the employer in net and the government in averages, while qualifications quietly drop out of pay. According to the literature framework, a rule-based starting point together with a transparent account of total remuneration reduces the pressure that today surfaces in demonstrations.

Part IV — Expected effects and risks

Dimension Expected effect Risk
Public service The pay matrix eliminates gross–net misunderstandings, and the compression indicator gives early warning of professionals leaving The matrix makes the differences between sectors public, which may give rise to new demands in the short term
Economy The inflation-plus-productivity starting point makes wage costs more predictable and aligns wage dynamics with euro adoption If the productivity data are late or disputed, the formula itself becomes a bargaining chip
Budget Accounting for the tax cut separately shows how much of the wage burden the state takes over If employers rely on the tax cut over the long term, gross wages fall behind and the budget bears the burden
Social and healthcare services Measurement attached to the sectoral rise helps target vacant posts Pay alone does not make up for missing staff; admission freezes will remain for a while

The main question to weigh lies with proposal 3.3. The employers’ argument is not unfounded: the 9 per cent SZJA does increase the net earnings of minimum wage earners. But if the gross rise falls short because of it, two side effects follow. The guaranteed minimum wage and the bottom of the public employee pay scale also rise more slowly, which reinforces the compression described in 3.2. And the burden is borne by the taxpayer instead of the employer. The argument made in Portfolio’s euro podcast also deserves attention: persistently double-digit pay rises are hard to reconcile with the price stability condition of euro adoption. The proposal therefore does not defend the 14 per cent; it fixes the starting point and treats the catch-up element as a matter for negotiation. The proposal becomes risky if the productivity data are produced not by an independent source but by one of the negotiating parties. This can be prevented by fixing in advance a methodology based on KSH data.

Part V — Measurability and summary

5.1 What is worth following? (suggested KPIs)

MIAK suggests following these performance indicators (KPIs, Key Performance Indicators):

  • Sectoral pay matrix: whether the annexes of the 2027 budget bill contain, by sector, the number of staff, the pay envelope, the gross rise, the month of entry into force and, separately, the SZJA effect. Worth following when the bill is submitted, by 15 November 2026 at the latest.
  • Minimum wage agreement: whether a written VKF agreement is reached by 15 December 2026 that records the actual values of the three conditional indicators and the table showing the gross rise, the net change and the employer cost.
  • Compression indicator: whether the first sectoral breakdown appears by 31 March 2027, and whether the 2028 budget bill justifies falling ratios.
  • Social care: whether the share of vacant posts in the institutions of the Directorate-General for Social Affairs and Child Protection (SZGYF) falls from the current 12 per cent to half by the end of 2027, and whether the number of sites under an admission freeze (currently 26) decreases substantially.

5.2 Summary

MIAK asks three things of decision-makers. Together with the budget bill, the Government should publish the exact content of the pay rise by sector, with the gross rise and the effect of the tax cut on separate lines. The distance between graduate pay and the guaranteed minimum wage should be measured every year, and any decline should have to be justified. And in the minimum wage bargain, the VKF should record the departure in writing, with reference to the conditional indicators of the three-year agreement. The starting point should be inflation and productivity, and the state’s tax cut should be accounted for separately. The proposals touch on two MIAK foundational values. Transparency, because part of the current protests stems from workers not knowing what the announced figure means. And data-drivenness, because today the pay dispute is a trial of strength: the louder sector gets more, although decisions could also be made on the basis of measurable indicators.

Part VI — Reasoning and further sources

6.1 Press framing by spectrum

Left-liberal band. Telex approached from two directions. On the one hand, it reported on the demonstration of culture-sector workers. It also covered the statements of government figures in detail: the explanations referring to “16 years of neglect” and the inherited deficit, the promise to reach the 25 per cent target later, and the relaunch of the interest reconciliation council. On the other hand, it embedded the social care rise in a longer report at the level of the care system. In it, pay is only one factor alongside the shortage of places, waiting lists and the agency nurse system. On this day the pieces of 444.hu and HVG focused on the budget as a whole; in the processed material they did not cover this sub-area separately.

Mainstream band. 24.hu wrote in a factual frame. It reported the interior minister’s announcement and the agenda of the VKF meeting, together with earlier statements from the employers’ and the trade union side. In the processed material Index did not cover this sub-area separately.

Economic band. Portfolio treated the topic primarily as a question of cost and bargaining. It highlighted the distance between the position of the employers (4 and below 6 per cent respectively) and of the employees (14 per cent), and the fact that companies are relying on the tax cut. It reported MESZK’s protest factually. In a separate article it presented the expert study on twenty years of disorder in public service pay systems, and in its euro podcast it discussed the link between wage dynamics and euro adoption.

Government-critical conservative band. Magyar Nemzet wrote in a frame of “deception” and “unkept promise”. The article on the culture-sector demonstration foregrounded the workers’ personal pay examples and holding the government to account for the 25 per cent election promise. The article on the minimum wage stressed that the head of government did not speak about the minimum wage in Parliament, and that fulfilment of the three-year agreement is also in doubt. The same article quoted representatives of both negotiating sides in detail. The pieces of Mandiner and Népszava were not in the processed set.

6.2 Facts and data

Data Value Source
Additional healthcare funding in 2027 510 billion HUF Portfolio, 19 October 2026
Of which pay settlement for healthcare professionals 192 billion HUF, 17% rise on average Portfolio, 19 October 2026
MESZK’s expectation at least half of the additional funding for pay, with the rise still in 2026 Portfolio, 19 October 2026
Pay rise for social care workers 17.8% on average Telex, 20 October 2026
Pay rise in public collections and community culture 10.7% (on top of the tax allowances) Telex, 19 October 2026; Magyar Nemzet, October 2026
Culture-sector pay approx. 460 thousand HUF gross President of KKDSZ (Telex, 19 October 2026)
KKDSZ demand at least 790 thousand HUF gross in graduate jobs, 915 thousand HUF with an academic degree Magyar Nemzet, October 2026
Interior sector pay rise from 1 January 2027 15% on average; for uniformed staff 13% in the upper band, over 20% in the lower band; 15% for law enforcement administrative employees 24.hu, 19 October 2026
Minimum wage in 2025 and 2026 290,800 HUF (+9%), 322,800 HUF (+11%); guaranteed minimum wage +7% in 2026 Magyar Nemzet, October 2026
Three-year wage agreement for 2027 +14% minimum wage rise 24.hu, 20 October 2026; Portfolio, 19 October 2026
Employer offers for 2027 4% and below 6% respectively Portfolio, 19 October 2026
MASZSZ calculation based on the conditional indicators 12% Magyar Nemzet, October 2026
SZJA rate on the minimum wage from 2027 9% 24.hu, 20 October 2026
Government inflation assumption for 2027 3% Telex, 20 October 2026
Civil service salary base 38,650 HUF since 2008 Portfolio, 19 October 2026 (MKT study)
Public service employment (broadest definition) approx. 1.1 million people Portfolio, 19 October 2026 (MKT study)
Gender pay gap in the public sector often 10–15% by sector Portfolio, 19 October 2026 (MKT study)
SZGYF posts (early October) 13,251 authorised, 11,660 filled, 1,591 vacant Telex, 20 October 2026
Admission freeze 26 state residential sites, in ten counties Telex, 20 October 2026
Social care pay level in 2025 social workers earned 55%, carers 45% of the graduate average Telex, 20 October 2026

6.3 Policy dimensions

  • Employment policy (programme points) — the starting point of the minimum wage bargain and the procedure of tripartite consultation (FO10), the data background of the compression indicator (FO1), and the gender pay gap in the public sector (FO4);
  • Public administration and e-government (programme points) — unifying the public service pay logic, the sectoral pay matrix and the compression indicator (KI6);
  • Healthcare (programme points) — pay settlement and retention of healthcare professionals (E6);
  • Social policy (programme points) — the pay situation of the social care system, the European framework of adequate wages and social dialogue (SZ12);
  • Culture (background material) — the workforce situation of public collections and community culture, the relaunch of the culture-sector interest reconciliation council;
  • Economy (programme points) — tripartite wage coordination and the alignment of wage dynamics with euro adoption (G18), the pay matrix as budget data (G1).

6.4 Literature in detail

6.4.1 Jeurissen and co-authors: Health system effects of economy-wide inflation

The 2024 study by P. Jeurissen, R. Hasan, M. Den Besten and J. Cylus, published by the European Observatory on Health Systems and Policies, examines how the 2022–2023 wave of inflation affected European health systems. It finds that few countries adjust pay to inflation automatically. It describes the Austrian example as follows:

“In Austria, trade unions typically use the consumer price index, plus or minus economy-wide productivity developments, as the starting point for wage bargaining (the so-called Benya formula).” (own translation)

According to the study, in the Netherlands pay-related expenditure is adjusted using a technical formula that tracks average wage agreements in the private sector. The authors also note that where neither wages nor prices automatically follow inflation, healthcare workers have tried to bring their earnings in line with the cost of living through protest, with varying success. Applied to the Hungarian situation: the conditional indicators of the three-year agreement already point towards a formula; only the starting point has not been stated. Proposal 3.3 does this, adopting the structure of the Austrian practice and treating the catch-up element as a separate matter for negotiation.

📖 Source: Jeurissen P., Hasan R., Den Besten M., Cylus J.: Health system effects of economy-wide inflation: How resilient are European health systems? (European Observatory, Policy Brief 65, 2024)

6.4.2 Susan Rose-Ackerman: Corruption and Government

The section of Rose-Ackerman’s book on public service pay reform starts from the observation that in many transition economies — Eastern Europe included — public service pay has slipped behind the private sector. The author describes two phenomena directly relevant to the Hungarian debate. The first is the compression of the pay scale: in several countries pay for jobs requiring high qualifications fell more than for low-skilled ones. In such cases skilled staff are hard to recruit and retain, so reforms explicitly aimed at restoring pay differentials. The second is that public service remuneration includes benefits beyond formal pay, so comparisons must look at the whole package. According to the book’s concluding chapter, if pay is allowed to deteriorate relative to the private sector and pay differentials are too small for promotion to act as an incentive, the quality and integrity of the public service also suffer. Applied to the Hungarian situation: the net pay of museologists and archivists with doctorates is today close to what the rising guaranteed minimum wage may reach within a few years. And the tax cut is part of total remuneration, but not a substitute for pay. Proposal 3.1 asks for a transparent, line-by-line account of the whole package, and 3.2 for measuring compression.

📖 Source: Susan Rose-Ackerman: Corruption and Government: Causes, Consequences, and Reform

6.4.3 European Commission: The European Pillar of Social Rights Action Plan

In its chapter on fair working conditions, the 2021 Action Plan of the European Pillar of Social Rights treats adequate wages as a foundation of the social model:

“Ensuring that jobs pay adequate wages is essential for adequate working and living conditions for workers and their families, as well as for building fair and resilient economies.” (own translation)

Here the document also refers to the proposal for a directive on adequate minimum wages, which sought to set minimum standards while respecting national traditions and the autonomy of the social partners. In the section on social dialogue it asks authorities to consult the social partners when designing relevant policies and legislation. Applied to the Hungarian situation, two lessons follow. MESZK and KKDSZ both objected that they learned of the rise affecting them from a speech in Parliament, without prior consultation. And in the minimum wage bargain, the question of an adequate wage cannot be separated from the negotiating procedure. Proposal 3.3 therefore asks not only for a number but for a written, justified procedure.

📖 Source: European Commission: The European Pillar of Social Rights Action Plan, COM(2021) 102

6.5 International comparison

Austria and the Netherlands: a formula as the starting point. According to the study presented in 6.4.1, Austrian wage bargaining starts from a formula of inflation and productivity, while Dutch healthcare pay expenditure tracks average wage agreements in the private sector. Neither system is automatic wage-setting: the formula is the starting point of negotiation, not its outcome. This difference matters for the Hungarian adaptation. The role of the VKF remains, but the debate is about the reasons for departing from the formula, not about percentages starting from nothing.

European healthcare pay protests. The same study describes how during the 2022–2023 inflation period nurses in several European countries, for example Malta, took protest action, and strikes were announced in Italy. According to the authors, pay rises were substantial in many places, 15–25 per cent, but high inflation took away part of the purchasing power gain. Only a few countries, including Norway and Sweden, reported no discontent among healthcare workers. The lesson for the Hungarian sectoral rises: the 17 per cent average is worth more than a one-off gesture only if it then tracks prices according to a rule.

Consistency of the public service pay logic. The study reported by Portfolio mentions the British principles of “fair pay”: a fair level of pay, proper procedure, and transparent and accountable remuneration. These three elements are consistent with proposals 3.1 and 3.2.

Employment policy

  • FO1 — Employment data platform
  • FO4 — Measuring labour market discrimination
  • FO10 — Modernising wage bargaining — tripartite wage consultation forum

Public administration and e-government

  • KI6 — Competitive public service pay system

Healthcare

  • E6 — Nurse retention package

Social policy

  • SZ12 — National action plan for the European Pillar of Social Rights

Economy

  • G1 — Data-driven budget
  • G18 — Tripartite wage coordination council

Proposed new programme point: Public service compression indicator — the ratio of pay in jobs requiring a university degree to the guaranteed minimum wage, by sector, published annually, with a mandatory budget justification in case of decline — for the Public administration and e-government area.

6.7 List of sources

Press sources (MIAK press monitor, 20 October 2026 — topic 2):

Knowledge-base references (literature):

  • 📖 Jeurissen P., Hasan R., Den Besten M., Cylus J.: Health system effects of economy-wide inflation (European Observatory, Policy Brief 65, 2024)
  • 📖 Susan Rose-Ackerman: Corruption and Government: Causes, Consequences, and Reform
  • 📖 European Commission: The European Pillar of Social Rights Action Plan

MIAK internal materials:

  • MIAK policy area: Employment policy (programme points; programme point ID: FO1, FO4, FO10)
  • MIAK policy area: Public administration and e-government (programme points; programme point ID: KI6)
  • MIAK policy area: Healthcare (programme points; programme point ID: E6)
  • MIAK policy area: Social policy (programme points; programme point ID: SZ12)
  • MIAK policy area: Culture (background material)
  • MIAK policy area: Economy (programme points; programme point ID: G1, G18)
  • MIAK press monitor, 20 October 2026 — topic 2, score: 89/100

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