March 31, 2010 / 8:15 AM / 9 years ago

Learn smarter, not longer, crisis teaches Hungarians

BUDAPEST (Reuters) - When Adrian Ozsvath graduated from one of Hungary’s top universities in 2008, his degree seemed like a one-way ticket to success. He has been looking for a job ever since.

Two decades after communism collapsed, Hungary’s employment rate is second-lowest in the European Union. A shortage of skilled labor has come to deter foreign investment, and the education system cannot respond adequately to market needs.

After elections on April 11 and 25 in which conservative opposition party Fidesz is expected to triumph, tackling these issues should be top of the agenda if the new government wants to lead the economy out of the deepest slump in nearly two decades, analysts say.

Failure to reform the education system and bring legions of inactive people back into the labor market could mean Hungary, which sought IMF aid in 2008 to avert a funding crisis, falls further behind in central Europe’s race to adopt the euro.

Young graduates who invested years to earn a coveted university degree, still seen by many as a panacea against unemployment, are queuing outside a crowded labor office in central Budapest.

“I never expected it would be so hard to find a place,” said Ozsvath, 26, who got his management degree at the Budapest University of Technology and Economics, one of 70 accredited institutions in a country of just 10 million people.

Ozsvath is now retraining to become a chartered accountant. A fresh start increasingly seems the only way out for thousands of young graduates like him, who have realized there is no demand for their hard-earned qualifications.

Their plight is the by-product of a growing mismatch between the education system and the labor market, two areas in need of decisive change if Hungary is to grow out of its high debt.

The number of job-seeking graduates soared 53 percent over a year to 30,787 in February. With more than 300,000 students due to leave university within the next five years, fresh graduates will find it ever harder to find suitable jobs.

Hungary’s unemployment rate jumped to 11.4 percent in the December-February period, the highest since 1994.

Employers say the global economic crisis has magnified existing problems: a rigid education system, weak vocational training and poor co-ordination with the labor market.

“It’s very good that young people see their future in learning and getting a better education, but I think more and more people leave university with no useful qualification,” said Eva Vadaszi, head of an employment office for career-starters.


Diana Hazda, 25, has a degree in communications, one of the most fashionable majors of recent years, but her diploma has failed to land her a job since she finished school last May.

“I came here as a last resort, that maybe somebody will help, but I have yet to find anything,” said Hazda, who admits that weak language skills may also have a role in her malaise.

Labor market experts say the country has no need for so many humanities students, teachers, lawyers, economists and managers, while there is a shortage of skilled workers in traditional blue collar jobs.

“If 50 good butchers were to walk in today, we could instantly land them a job. The same goes for 50 good bakers,” Manpower’s Hungarian unit said. “But we just could not help somebody with a communications degree and no language skills.”

When the economy was booming and universities flooded the labor market with about 50,000 fresh graduates a year, Tibor Cseh, who runs a printing company on the outskirts of Budapest, had to fill vacancies with foreign workers.

“Generally the prestige of someone working in a factory is low, so young people have not really been latching on to these jobs,” said Cseh, adding that two-thirds of his employees came from neighboring countries, such as Serbia and Romania.

“Basically the esteem of work has diminished over the past years. Everybody wanted to take the easy way out, while some of those who were more agile and able went abroad, so there was a vacuum, which had to be filled.”

In a Reuters pre-election poll last month, analysts ranked reform of the education system as the second most important priority for the new Hungarian government.


A migration survey in 2009 showed over 20,000 Hungarians leave the country each year to start a new life in the West, mainly in Germany and Austria but more recently also in Britain.

The readiness to leave is most stark among doctors, whose exodus since Hungary’s entry into the EU in 2004 recently prompted the government to pass controversial new rules binding young doctors to Hungary for four years.

Edit Molnar, a 30-year-old pediatrician, began looking for a job abroad even as she was preparing for her specialist examination in Hungary. Weeks after getting her certificate she packed up and left for Britain.

“The beginning is very difficult and I’ve left many good things behind, but I would never go back,” Molnar said by telephone. She now earns about seven times what she would have made in Hungary, but that was just one factor in her decision.

“I just had no prospects at all back home,” she said. “In Hungary people are incredibly frustrated, they are very tired and struggle immensely, but it’s no wonder as they work all out for very little money.”

Most freshmen, cushioned from the harsh realities of the labor market, think little of how they will make ends meet once they are cut loose from the umbilical cord of university life.

But final year students like 27-year-old Gyorgy Dala, who reads Turkish studies at ELTE, one of Hungary’s elite universities, are grimly realistic about their prospects.

“It’s good to live in Hungary, I really like it here and I have no desire to leave but it’s tough,” he said on his way to a lecture from the tax office, still digesting the shock of how many different taxes his start-up business would have to pay.

“Finding a job and making a decent living out of it, and starting anything new is just hard as hell nowadays.” (Reporting by Gergely Szakacs, editing by Paul Taylor)

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