ILO: Extreme poverty in Hungary could be eliminated for less than 0.01% of GDP

July 13, 2017

According to the International Labour Organization (ILO), an agency of the United Nations, extreme and moderate poverty in Hungary could be eliminated for about USD 17 million (HUF 3.4 billion) — that’s 0.01 percent of Hungary’s GDP. Living in extreme and moderate poverty means one lives on less than USD 3.10 purchasing power parity (PPP) per capita per day.

Last year, Eurostat found that almost 10 percent of Hungarian workers live in relative poverty (even after receiving state support!), which means they earn less than 60 percent of the median income. Eurostat’s figures for 2016 showed an increase of almost 2.6 percent since 2014.

The Hungarian government argues that its public employment scheme has provided a great opportunity for the unemployed to enter the labor market and reduce poverty. This policy is the largest in the country and employs over 200,000 people, but according to the European Commission the scheme does not sufficiently reintegrate workers into the open labor market.

The Commission has also found that poverty among children and Roma remains particularly high. A significant proportion of employed Roma work in the public works scheme. Their effective integration into the open labor market remains limited so far.

According to the Commission, in Hungary “the adequacy and coverage of social assistance and unemployment benefits is limited. The duration of unemployment benefits is still the lowest in the EU at 3 months, below the average time required by job seekers to find employment. The 2015 social assistance reform streamlined the benefits system but it does not seem to have guaranteed a uniform and minimally adequate living standard for those in need.”