Hungary’s new government is facing mounting pressure to reconsider a planned halt to visas for non-European Union workers, as companies and business groups warn that an abrupt ban could affect production in an already tight labour market.
The Tisza Party, led by Prime Minister Peter Magyar, which ended right-wing leader Viktor Orban’s 16-year rule in an April 12 election landslide, has said it would stop issuing visas to workers from outside the European Union from next month.
“We will not allow foreign guest workers to take the jobs of Hungarians and push down salaries,” the Tisza Party said in its manifesto, a position that has raised concerns among some of Hungary’s largest foreign investors
The regional head of staffing firm Randstad warned that an outright ban could strain companies dependent on foreign labour.
“An outright ban on workers from outside the EU would not be viable in the long run,” Randstad’s managing director for the Czech Republic, Hungary and Romania, Sandor Baja said.
He noted that large swathes of Hungary’s workforce are set to retire in the next decade.
“I sincerely hope that economy minister Istvan, Kapitany’s team will allow economic rationality to prevail here,” Baja said on Friday.
Baja said Hungarians under 25, those over 55 and residents of smaller towns represent an untapped pool of around 400,000 workers, but mobility constraints limit how far this could ease shortages.
Foreign workers account for just 2% of Hungary’s workforce based on official statistics. Unlike Germany, Poland or the Czech Republic, Hungary has not seen a large-scale inflow of Ukrainian refugees to help shore up its labour market.
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Business leaders said however, certain sectors, such as manufacturing and services, are heavily reliant on foreign workers.
The President of the American Chamber of Commerce, Akos Janza said; “foreign workers both white and blue collar account for up to 20% of workers at some companies.”
“We have a member company, which would have to cut a full shift (without guest workers),” Janza said on Friday, adding that the company worked in manufacturing, a key sector in Hungary.
The head of the German business chamber in Hungary, Robert Keszte, has warned that the planned visa halt would hit the economy hard.
“In our view, the Hungarian economy cannot currently function without workers from third countries (outside the EU),” he said.
Reuters
