He said union had fought for ten years to ensure that the minimum wage for unskilled workers equals the subsistence level while that of skilled workers should rise above the basic minimum wage.

Minimum wages for unskilled workers will be raised by 15% and those with a secondary education diploma will get a 25% hike in 2017, according to the agreement the government reached in talks on Tuesday. In 2018, the minimum wages will be increased by a further 8% and 12%, respectively.

In 2017 payroll taxes will be cut by 5% and by a further 2 percentage points the following year. The agreement will contribute towards a more balanced labour market within the foreseeable future, he said, adding that the deal would also boost the country’s competitiveness.

Republished with permission of Hungary Matters, MTI’s daily newsletter.