The Last Stand: Trades Unions in Hungary

by Carl Rowlands

There has been a resurgence of labour activism in Hungary. The union movement still has its problems, but there are signs that the urgency of the situation is beginning to focus minds.

First published: 27 July, 2011 | Category: Economy, Employment & Welfare, Europe, International

Hungary, 2010. A new conservative government comes to office with a radical, largely undeclared programme. It embarks on plans to ‘reform’ the public sector, involving massive numbers of redundancies in government, and one-sided changes to what it describes as an over-generous pension scheme. So far, so familiar to people in Britain. But there’s more. Despite more than 10% unemployment, it plans to extend the standard working week to 45 hours. It wants to change the current probationary period for employees from 3 months to 6 months, to make it easier to sack staff. The unions, excluded from national consultation, have been described as ‘clowns’ by Hungarian Prime Minister Viktor Orbán. It appears that he feels able to treat the unions with contempt, despite his earlier criticisms of the previous, Socialist-led government for pursuing anti-worker policies. In a nutshell, this encapsulates the treatment of organised labour by the entire Hungarian political class: enlisted where useful, then discarded when they are not.

Yet more outrageous plans overflow from the febrile minds of the Hungarian Right. After just 90 days of unemployment, welfare claimants are to lose all financial support, and will be expected to enrol in a public works scheme, where they will be assigned a manual role, most probably in construction, doing the sort of strenuous work which the machines would otherwise be doing, for much less than the minimum wage. Their supervisors in this labour will, most likely, be the formerly retired policemen and policewomen, having been dragged back from retirement by a government determined to extract what it can from a reluctant labour force, bullying its pensioner firemen and policemen into returning to the jobs which, in some cases, they left more than 5 years ago. These recycled public sector workers will, in many cases, be tasked with guarding and monitoring the new labour camps created by the crackdown on welfare claimants, often located on sites far from their homes, where trailers will provide rudimentary accommodation for those guilty of the crime of being poor. In the absence of a strong, credible and united political opposition, the trades unions are thrust into the front-line. They are the bulwark representing the human rights of employees, but also for what remains of political freedom in Hungary, and a block to a full reversion to feudal law.

It is a role that might not come naturally to organisations that were, in many cases, co-opted and compromised by the communist system. The elites created by the imposition of a totalitarian soviet-style regime in the late 1940s and early 1950s were always wary of the potential for working-class discontent and self-organisation, undercurrents that broke through during the 1956 Revolution. The crushing of the revolution prompted a general strike, led by workers’ councils, which continued well into 1957. It took some years for the Kádár regime to eventually subdue the workers’ councils themselves. From this point onwards, official trades unions were extensively used by a nervous, yet somewhat flexible, regime to provide a degree of legitimacy. Unions were responsible for providing an alternative, thoroughly vetted, slate of candidates in what then passed for elections. In addition, they were charged with running many of the best holiday locations around Lake Balaton; playing the role of bluecoats in the paternalistic work and holiday camp of Hungary in the 1960s and 1970s. The incorporation of trades unions into the communist system, and continued links to the elites which came to dominate the Hungarian Socialist Workers’ Party, were to later result in bitter political divisions between different union confederations.

The revolt of Poland’s Solidarity movement in the early 1980s was the worst nightmare come true for many of the Eastern Bloc’s rulers, providing a premonition of their own demise. Yet despite a few transitional years of instability and social mobility, democratically elected governments in Hungary have, in practice, been either unable or unwilling to consistently formulate policies in the interests of working people. One of the most outrageous aspects of the current plans for labour camps is that, in Hungary since 1990, it has been so very easy to be poor. Shock therapy in the early 1990s drove entire communities to the wall; a result of the deliberate severing of cross-border trading links, and the financialisation of an economy which lacked an indigenous financial sector. Half a million unionised jobs disappeared in a few years. To this day, unemployment in post-industrial areas remains, in some cases, above 40%.

The new economy which had emerged by the time Hungary joined the EU in 2004 was largely composed of a patchwork of large multinationals and many small businesses and micro-businesses, where labour law was loosely, if ever, enforced. Overt transgressions by large multinational companies were notable, and well-publicised. Yet tax evasion, fraud and bullying runs stronger still amongst the smaller indigenous companies. The practice of paying the minimum wage, with untaxed top-up payments, ensures many local employers avoid much of their tax responsibilities. This places employees in an invidious, extremely weak situation, depending on a gentlemen’s agreement for much of their income, whilst contributing minimally to their own social insurance.

Even in the boom years, the labour market that young people experienced after finishing college and university was often both hostile and dissipated, an environment in which exploitation and nepotism flourished, but where the concepts of worker representation and workplace democracy was almost unknown. It was great for some, yet it consistently valued rentiers, lawyers and economists over skilled or semi-skilled workers. In 2000, GDP grew by around 5%, whilst real wages grew by only 1.5%. Before the crash, the average wage of Hungarian workers was projected to possibly catch up with the next closest in Old Europe in 2030. Since the 2008 financial crisis, which nearly drove Hungary to default in its first phase, all bets are off.

The difficulties of obtaining practical recognition from intransigent foreign companies and in organising within smaller workplaces meant a substantial decline in union membership and resources, and a concentration of unions in certain sectors. Businesses are able to to move into low-wage areas where the workforce can be desperate. Government tax breaks are unconditional and not linked to the establishment of a social dialogue between management and unions. The accession of the EU10 in 2004 created a ‘New Europe’ dynamic, whereby firms are encouraged to relocate away from what are often deprived areas in Western Europe towards the dynamic eastern economies of Poland, the Czech Republic and Hungary, where labour is cheaper. In the way it has pursued enlargement, the European Union has deliberately attempted to drive a wedge between workers in the ‘overpaid’ West and the ‘hungry’ East.

Hungary is perhaps unusual. Unlike many of its neighbours, it has a vocal political culture and there are certain expectations extending beyond current economic and social possibilities. Some of these stem from different strands of reform communism, some of these are from even older social-democratic traditions, whilst other expectations are founded in the global social justice movement. It appears that the trades unions are now going to actually mount a concerted attempt to defend their own existence. In response to Viktor Orbán’s labelling of unionists as ‘clowns,’ they have orchestrated a set of demonstrations in Budapest, called the ‘Revolution of the Clowns.’ With some recent demonstrations bringing more than 50,000 onto the streets, it seems that the public are beginning to listen to a trade union movement that can, hopefully, transcend its political divisions and dependencies. It’s still a long way from mobilising throughout Hungarian society, but the urgency of the situation is beginning to focus minds on some of the most fundamental questions.

Carl Rowlands is an activist and occasional writer based in Budapest.

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