BUDAPEST, Hungary--In the middle of a hip Budapest neighborhood, at a multicultural club called Szoda, a group that calls itself “Bitches in Trouble” (picsak a pacban) is having its regular meeting.
The members are recently-graduated lawyers, teachers, economists, and media experts, most of them women, who have been hunting for a job for six or seven months. In vain.
Not long ago they were dreaming about shiny futures and fast careers--and now, over their beer, they can no longer hide their cynicism and rising anger. (Their parents’ income still allows them to go for beers.)
“The public sector is under a hiring freeze, the private sector doesn't have much to offer, and multinational companies select their employees with no mercy,” is how one member sums up their experiences. They're all wondering whether, after a dozen futile attempts to find a job, their luck will ever improve.
GOVERNMENT ENCOURAGEMENT
Before the collapse of the communist system, a successful entrance exam to a university meant being able to find a secure “pensioner” job--meaning a job through retirement--since the higher education system was set up to strictly filter, then distribute the players in the job market, all according to the centrally-planned economy.
Thousands of families planned their children's education this way. [...] The political culture also encouraged young people to earn degrees--people were motivated by slogans about a “knowledge-based society” and the government's policy goal of sending 40 to 50 percent of an entire generation on to higher education.
The policy was based on the claim that any higher degree would make it easier to find a job. It's impossible to know whether that promise was the naive view of politicians, or if it was a cynical way to hide the country's growing unemployment problem.
In the first years after the collapse of the socialist system, many skilled laborers in socialist industry were made redundant. The economy absorbed graduates; they had no problems finding a job until about 2000. However, as recession hit, the job market changed. Degrees earned in the "paper mills" of higher education--low-prestige universities--suddenly lost their value. Today, it is not the school that does the selecting, but the job market. As a result, many people are stalled in the slow lane after they graduate.
Data from the Ministry of Labor shows that the number of unemployed graduates registered reached its peak last July: more than 15,000 people, or nearly 4 percent of the total unemployed population.
Unofficially, the number of unemployed people who have a degree is thought to be much higher, around 40,000 to 50,000. The difference in numbers is attributable to the fact that most new entrants to the workforce do not register themselves as unemployed, thinking it might work against them in their job search.
Experts say the number of graduates who are unemployed hasn't been this high for decades. Today, even people who have only a basic education are more desirable than young college graduates.
The situation is expected to get worse. University funding levels are determined by the number of students they enroll, so schools are still heavily recruiting applicants. It is a case of the education market ignoring the needs of the job market.
But this has unforeseeable consequences. Even the Minister of Education, Balint Magyar, has admitted, “If the gap between job market needs and the number and skills of graduates keeps getting wider, the Hungarian economy will face difficulties, particularly after the country joins the European Union.”
Employment experts think that the recession, after negatively affecting other layers of society, has just started to impact the elite.
Laszlo Hadi, the executive director of the Job Group employment agency, says new entrants are not welcome in the job market. Only 4 to 5 percent of all job advertisements ask for these kind of candidates, he said, and those that do are mostly white-collar, skilled positions--working in customer service and call centers, as secretaries and insurance agents--that do not really require higher education.
“The reason why multinational companies usually do not welcome new entrants is that they are typically inexperienced, in need of training, and since they are more mobile than family people, there is no guarantee that they will stay at the company after their expensive training," Hadi explained.
Smaller enterprises and institutions with less than 20 employees, which comprise the majority of employment opportunities, aren’t happy to work with inexperienced applicants, either, he said.
And in the public sector, cutbacks have made the situation equally difficult. "Headhunting agencies don’t make any profit when they place people in the public sector, since these agencies are paid on the basis of the wage of the employee they recruited (they usually receive a fee equal to eight to 10 weeks of a new employee’s gross salary). But new public sector employees make so little that it is not worth finding a job for them."
New graduates have it the worst, Hadi said, because the “remnants” of last year are still in the job market, and those who have been made redundant or who still dare to “roam around” hoping to find a better job are also competing.
Some time ago, a new entrant could find a job within three to four months. Now the average search time is more like six to eight months, because the number of vacancies is so limited.
SNAPSHOTS OF THE UNEMPLOYED
Loser No. 1: “I’m a first-generation intellectual; my degree is the result of a family investment, and the financial consequences have been a serious burden for my parents. I’ve also given up everything, I've just been toiling in the library for four years. I’ve learned everything except the most important thing: how to sell this knowledge. […] I’m still supported by my parents.”
Loser No. 2: “I’ve been looking for a job for months, and I’ve gradually gotten to know the market’s needs and expectations. So I’ve edited my CV accordingly: first I cut out the part referring to my objective to earn a second degree, then I deleted the list of papers I’ve published, then the fact that I attended a student science group. As I was 'excising' my past--which I used to be proud of, and which I thought would help me find a job--job offers started to come in. Companies don’t want smart people, they want vassals.”
Loser No. 3: “In my experience, 70 percent of job vacancies are not even advertised, but filled through nepotism or friends. Certain colleges and universities are being blacklisted by more and more job agencies. People who graduated there aren’t even included in the database. They just look at your degree, and you’re done. My degree isn't even as useful as toilet paper.”
Loser No. 4: “Companies with vacancies know that there’s a huge surplus in the job market, so they employ applicants only under humiliating conditions. For instance, the company hires you on three months probation and for minimum wage. Then in the last week of probation they fire you with some cheesy excuse, making room for the next cheap loser.” […]
“The length of time a new graduate spends looking for a job mostly depends on his or her salary expectations,” says Zsolt Fazekas, executive director of the International Hill employment agency. His opinion is that graduates in almost every field expect too much. At the online job fair for university and college students, candidate.hu, it's clear what those expectations are: newly graduated economists, computer scientists, engineers hope to gross 200,000 forints ($945) monthly.
These expectations are based on the fact that people graduating in the second half of the 1990s could still very quickly find good positions. Everyone seems to knows someone just a few years older than themselves who is now a manager, who started out at a monthly salary of 220,000 forints and now makes more than twice that.
But now, economics majors who graduate with no special qualifications are only offered around 75,000 forints ($350) per month, even by Budapest banks. At a forum in Gyor last fall, the Hungarian Economic Society noted that even in the western region of Hungary, where wages tend to be higher, a junior economist doesn’t make more than 80,000 to 100,000 forints per month.
Compared to the cost of earning a degree, or even just the cost of living, those figures are depressingly low. […]
WINNERS AND LOSERS
Although news about this alarming situation has started to reach the public, university and college applicants are still ignoring the new realities of the job market. In 2003, masses of students applied to the same easily accessible majors that “guarantee” future unemployment for the graduates. But could they have done anything else? Today it’s impossible to name a profession or major that ensures employment in five years. The few universities with good employment rates, such as the University of Technology and Budapest Business School, attract far more applicants than can be absorbed. […]
According to Bela Mang, the deputy secretary for higher education in the Education Ministry, “The number of people being accepted to higher-education institutions is determined by the needs of the applicants, rather than the demands of the job market.”
And in Hungary, owing to the high prestige of degrees as well as years of government propaganda, lots of people want to earn degrees. This has meant bigger and bigger senior classes flooding the job market. In 1990, there were 24,100 graduates; last year, 47,200 people aged 18-24 graduated from a college or a university.
This number is likely to increase. Since the collapse of the socialist system, the number of students has almost tripled; today there are almost 400,000 students pursuing higher education. Since schools are subsidized on the basis of the number of students, for them, the more the better, so a place is found for almost every applicant--even if "outstationed" schools have to be set up, or students have to take part-time or correspondence classes. [Editor's note: In Hungary there has been a trend for well-respected universities to open facilities called "outstationed faculties" in towns that don't have a university or college. The quality of education in these facilities is usually below that of the main university.]
The government is currently promoting a policy whose aim is to have every second member of the younger generation in college by 2010. By then, however, the number of people with a degree will be well over one million, so the majority of new entrants, it can be safely predicted, will be among the overqualified unemployed--frustrated, disappointed people who are under-utilized at low-paying jobs.
Even if Hungary experienced a job boom, the market could never absorb this many graduates. So the question is, what will happen to the educated masses in the next few years?
A TICKING 'DEGREE BOMB'
Some things seem certain, but their consequences are not predictable. Sociologists are warning that Hungary can expect a number of trends.
The continued failure to find a job, the feeling of continuous rejection and of being superfluous will lead to an educated but frustrated mass of people, and this mass will grow.
The disappointed new entrants are sure to compare their dead-end lives to the outstanding life quality of the market economy's elite. They will feel duped and misled. Looking for explanation and a way out, they might “export” their private problems to the social sphere.
Populist forces can use, and abuse, the strong emotions that will arise from the disappointment of the unemployed masses. These forces are likely to acquire a social base, easily mobilized, which has no attractive vision of the future, even with Hungary’s EU membership.
Some graduates will be forced to accept low-level jobs, thus pushing out less-educated people, which will lead to a “social avalanche.” The selection processes this “avalanche” generates might increase, creating further anger in the lower sections of society.
Others will probably try to find employment in Western Europe. Besides creating a brain drain, this will mean that a workforce trained by Hungarian taxpayers’ money will be used elsewhere. Furthermore, only the best are likely to make a success of it abroad--the rest will probably work as waiters, bar attendants, educated servants. This might decrease wages in the EU, even though these workers will still make more than graduates are making in Hungary.
The question is this: Is there a rational and politically acceptable solution?
Limiting the number of university and college students would be a defeat, a step backwards. Rationalizing education, closing down newly-started institutions or faculties would--because local professors would have to be fired--increase the numbers of “educated” unemployed. This would also increase regional differences in the country, since these “outstationed” sub-faculties were brought to life to help local brainpower stay home. Such a decision would pit voters of any political side against the party.
But hushing up the problem up wouldn’t be right, either. There is already a feeling among young people who consider themselves redundant, as well among families who have taking on the burden of educating their children seemingly in vain, that society is being divided, that they are the victims, on the losing side of the equation, despite all their efforts.
There is still an elite, there is still upward mobility, but only for a lucky few. As for the majority, the routes upward have been closed. And if someone from the winning side tells them to blame not the system but themselves, they will feel that they have been fooled, that they have been excluded from enjoying the long-awaited fruits brought by the fall of communism.
The members are recently-graduated lawyers, teachers, economists, and media experts, most of them women, who have been hunting for a job for six or seven months. In vain.
Not long ago they were dreaming about shiny futures and fast careers--and now, over their beer, they can no longer hide their cynicism and rising anger. (Their parents’ income still allows them to go for beers.)
“The public sector is under a hiring freeze, the private sector doesn't have much to offer, and multinational companies select their employees with no mercy,” is how one member sums up their experiences. They're all wondering whether, after a dozen futile attempts to find a job, their luck will ever improve.
GOVERNMENT ENCOURAGEMENT
Before the collapse of the communist system, a successful entrance exam to a university meant being able to find a secure “pensioner” job--meaning a job through retirement--since the higher education system was set up to strictly filter, then distribute the players in the job market, all according to the centrally-planned economy.
Thousands of families planned their children's education this way. [...] The political culture also encouraged young people to earn degrees--people were motivated by slogans about a “knowledge-based society” and the government's policy goal of sending 40 to 50 percent of an entire generation on to higher education.
The policy was based on the claim that any higher degree would make it easier to find a job. It's impossible to know whether that promise was the naive view of politicians, or if it was a cynical way to hide the country's growing unemployment problem.
In the first years after the collapse of the socialist system, many skilled laborers in socialist industry were made redundant. The economy absorbed graduates; they had no problems finding a job until about 2000. However, as recession hit, the job market changed. Degrees earned in the "paper mills" of higher education--low-prestige universities--suddenly lost their value. Today, it is not the school that does the selecting, but the job market. As a result, many people are stalled in the slow lane after they graduate.
Data from the Ministry of Labor shows that the number of unemployed graduates registered reached its peak last July: more than 15,000 people, or nearly 4 percent of the total unemployed population.
Unofficially, the number of unemployed people who have a degree is thought to be much higher, around 40,000 to 50,000. The difference in numbers is attributable to the fact that most new entrants to the workforce do not register themselves as unemployed, thinking it might work against them in their job search.
Experts say the number of graduates who are unemployed hasn't been this high for decades. Today, even people who have only a basic education are more desirable than young college graduates.
The situation is expected to get worse. University funding levels are determined by the number of students they enroll, so schools are still heavily recruiting applicants. It is a case of the education market ignoring the needs of the job market.
But this has unforeseeable consequences. Even the Minister of Education, Balint Magyar, has admitted, “If the gap between job market needs and the number and skills of graduates keeps getting wider, the Hungarian economy will face difficulties, particularly after the country joins the European Union.”
Employment experts think that the recession, after negatively affecting other layers of society, has just started to impact the elite.
Laszlo Hadi, the executive director of the Job Group employment agency, says new entrants are not welcome in the job market. Only 4 to 5 percent of all job advertisements ask for these kind of candidates, he said, and those that do are mostly white-collar, skilled positions--working in customer service and call centers, as secretaries and insurance agents--that do not really require higher education.
“The reason why multinational companies usually do not welcome new entrants is that they are typically inexperienced, in need of training, and since they are more mobile than family people, there is no guarantee that they will stay at the company after their expensive training," Hadi explained.
Smaller enterprises and institutions with less than 20 employees, which comprise the majority of employment opportunities, aren’t happy to work with inexperienced applicants, either, he said.
And in the public sector, cutbacks have made the situation equally difficult. "Headhunting agencies don’t make any profit when they place people in the public sector, since these agencies are paid on the basis of the wage of the employee they recruited (they usually receive a fee equal to eight to 10 weeks of a new employee’s gross salary). But new public sector employees make so little that it is not worth finding a job for them."
New graduates have it the worst, Hadi said, because the “remnants” of last year are still in the job market, and those who have been made redundant or who still dare to “roam around” hoping to find a better job are also competing.
Some time ago, a new entrant could find a job within three to four months. Now the average search time is more like six to eight months, because the number of vacancies is so limited.
SNAPSHOTS OF THE UNEMPLOYED
Loser No. 1: “I’m a first-generation intellectual; my degree is the result of a family investment, and the financial consequences have been a serious burden for my parents. I’ve also given up everything, I've just been toiling in the library for four years. I’ve learned everything except the most important thing: how to sell this knowledge. […] I’m still supported by my parents.”
Loser No. 2: “I’ve been looking for a job for months, and I’ve gradually gotten to know the market’s needs and expectations. So I’ve edited my CV accordingly: first I cut out the part referring to my objective to earn a second degree, then I deleted the list of papers I’ve published, then the fact that I attended a student science group. As I was 'excising' my past--which I used to be proud of, and which I thought would help me find a job--job offers started to come in. Companies don’t want smart people, they want vassals.”
Loser No. 3: “In my experience, 70 percent of job vacancies are not even advertised, but filled through nepotism or friends. Certain colleges and universities are being blacklisted by more and more job agencies. People who graduated there aren’t even included in the database. They just look at your degree, and you’re done. My degree isn't even as useful as toilet paper.”
Loser No. 4: “Companies with vacancies know that there’s a huge surplus in the job market, so they employ applicants only under humiliating conditions. For instance, the company hires you on three months probation and for minimum wage. Then in the last week of probation they fire you with some cheesy excuse, making room for the next cheap loser.” […]
“The length of time a new graduate spends looking for a job mostly depends on his or her salary expectations,” says Zsolt Fazekas, executive director of the International Hill employment agency. His opinion is that graduates in almost every field expect too much. At the online job fair for university and college students, candidate.hu, it's clear what those expectations are: newly graduated economists, computer scientists, engineers hope to gross 200,000 forints ($945) monthly.
These expectations are based on the fact that people graduating in the second half of the 1990s could still very quickly find good positions. Everyone seems to knows someone just a few years older than themselves who is now a manager, who started out at a monthly salary of 220,000 forints and now makes more than twice that.
But now, economics majors who graduate with no special qualifications are only offered around 75,000 forints ($350) per month, even by Budapest banks. At a forum in Gyor last fall, the Hungarian Economic Society noted that even in the western region of Hungary, where wages tend to be higher, a junior economist doesn’t make more than 80,000 to 100,000 forints per month.
Compared to the cost of earning a degree, or even just the cost of living, those figures are depressingly low. […]
WINNERS AND LOSERS
Although news about this alarming situation has started to reach the public, university and college applicants are still ignoring the new realities of the job market. In 2003, masses of students applied to the same easily accessible majors that “guarantee” future unemployment for the graduates. But could they have done anything else? Today it’s impossible to name a profession or major that ensures employment in five years. The few universities with good employment rates, such as the University of Technology and Budapest Business School, attract far more applicants than can be absorbed. […]
According to Bela Mang, the deputy secretary for higher education in the Education Ministry, “The number of people being accepted to higher-education institutions is determined by the needs of the applicants, rather than the demands of the job market.”
And in Hungary, owing to the high prestige of degrees as well as years of government propaganda, lots of people want to earn degrees. This has meant bigger and bigger senior classes flooding the job market. In 1990, there were 24,100 graduates; last year, 47,200 people aged 18-24 graduated from a college or a university.
This number is likely to increase. Since the collapse of the socialist system, the number of students has almost tripled; today there are almost 400,000 students pursuing higher education. Since schools are subsidized on the basis of the number of students, for them, the more the better, so a place is found for almost every applicant--even if "outstationed" schools have to be set up, or students have to take part-time or correspondence classes. [Editor's note: In Hungary there has been a trend for well-respected universities to open facilities called "outstationed faculties" in towns that don't have a university or college. The quality of education in these facilities is usually below that of the main university.]
The government is currently promoting a policy whose aim is to have every second member of the younger generation in college by 2010. By then, however, the number of people with a degree will be well over one million, so the majority of new entrants, it can be safely predicted, will be among the overqualified unemployed--frustrated, disappointed people who are under-utilized at low-paying jobs.
Even if Hungary experienced a job boom, the market could never absorb this many graduates. So the question is, what will happen to the educated masses in the next few years?
A TICKING 'DEGREE BOMB'
Some things seem certain, but their consequences are not predictable. Sociologists are warning that Hungary can expect a number of trends.
The continued failure to find a job, the feeling of continuous rejection and of being superfluous will lead to an educated but frustrated mass of people, and this mass will grow.
The disappointed new entrants are sure to compare their dead-end lives to the outstanding life quality of the market economy's elite. They will feel duped and misled. Looking for explanation and a way out, they might “export” their private problems to the social sphere.
Populist forces can use, and abuse, the strong emotions that will arise from the disappointment of the unemployed masses. These forces are likely to acquire a social base, easily mobilized, which has no attractive vision of the future, even with Hungary’s EU membership.
Some graduates will be forced to accept low-level jobs, thus pushing out less-educated people, which will lead to a “social avalanche.” The selection processes this “avalanche” generates might increase, creating further anger in the lower sections of society.
Others will probably try to find employment in Western Europe. Besides creating a brain drain, this will mean that a workforce trained by Hungarian taxpayers’ money will be used elsewhere. Furthermore, only the best are likely to make a success of it abroad--the rest will probably work as waiters, bar attendants, educated servants. This might decrease wages in the EU, even though these workers will still make more than graduates are making in Hungary.
The question is this: Is there a rational and politically acceptable solution?
Limiting the number of university and college students would be a defeat, a step backwards. Rationalizing education, closing down newly-started institutions or faculties would--because local professors would have to be fired--increase the numbers of “educated” unemployed. This would also increase regional differences in the country, since these “outstationed” sub-faculties were brought to life to help local brainpower stay home. Such a decision would pit voters of any political side against the party.
But hushing up the problem up wouldn’t be right, either. There is already a feeling among young people who consider themselves redundant, as well among families who have taking on the burden of educating their children seemingly in vain, that society is being divided, that they are the victims, on the losing side of the equation, despite all their efforts.
There is still an elite, there is still upward mobility, but only for a lucky few. As for the majority, the routes upward have been closed. And if someone from the winning side tells them to blame not the system but themselves, they will feel that they have been fooled, that they have been excluded from enjoying the long-awaited fruits brought by the fall of communism.
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