Central Europe Review: politics,
society and culture in Central and Eastern Europe
Vol 2, No 2
17 January 2000

Csardas C S A R D A S:
Rich Man, Poor Man: Some Statistics on Poverty in Hungary

Gusztáv Kosztolányi

The first problem encountered when carrying out an analysis of poverty is the definition of exactly what it entails. Where do you set the threshold below which an individual or group may be identified as poor? Even if an objective criterion is agreed upon by researchers, this is unlikely to coincide with the subjective assessments of individuals concerning their level of welfare. Poverty carries with it a stigma, as it is - rightly or wrongly - associated with certain groups on the fringes of mainstream society, such as the Roma population. Already in a minority, the dual marginalisation suffered isolates them as a convenient mustering point for negative connotations (the stock prejudices to be found wherever an excluded group is compared with the insider "us": dirty, thieving, stupid, wantonly promiscuous, criminal and so on). Often, therefore, where poverty and out-group membership combine, a self-reinforcing vicious circle of assumption and prejudice comes into being. Whereas internal distinctions may be used as a survival strategy by those who are down on their luck to salvage some self-respect ("I may be poor, but at least I'm not a gypsy"), these subtle perceptual differences are not necessarily apparent to uninvolved others who may not take the trouble to distinguish between one beggar and another on the street. Poverty is, in other words, relative on the level of subjective interpretation and variable on the level of dispassionate quantification.

One factor that influences subjective notions of what poverty means is the set of ideals and aspirations propagated by society. Western-style consumerism has triumphed in Hungary in the last decade, as witnessed by the construction of glittering edifices dedicated to the pursuit of material indulgence, and the elite nouveau riche is free to purchase the latest models of car, forms of home entertainment. Following fashion is the ultimate act of gratification, the apotheosis of conspicuous consumption, the visible and incontrovertible token of success. Behind the display windows in heated premises, goods are shown off to the best advantage to lure in the customers with bulging wallets. Those who cannot afford them are left to look on in envy or dream about a lifestyle beyond their means. The printed and the electronic media constantly inundate their audience with images of perfection and prosperity in advertising and in the fantasy world of soap operas and escapist fiction. Measured against those standards, even the owner of a modest home might feel inadequate. The collectively idolised vision nurtures expectations, is solidified into a cultural cliché and proclaims itself to be democratic (attainable by all, provided they can cope with the price tag).

In the West, inner cities are deprived wastelands, deserted at night by all but the roving and restless gangs of youths up to no good. In the Hungarian capital, a similar schizophrenia exists, but it is the centre, the historical kernel, surrounded by a sea of deprivation cast in concrete, that is the capital's pride, its trademark. The sprawling housing estates of Pest stretch as far as the eye can see when viewed from the tranquil and rustic tree-clad hills of Buda, forming an impoverished perimeter where the tourists that flock to the city in search of violin serenades and romantic dinners seldom venture. In the dormitory suburbs, ordinary Hungarians live out their lives amongst the boarded up windows, discount stores and bottle shards. They take refuge in the cramped quarters of their high rise flats, shutting out the noise from their neighbours by turning up the volume on the TV set. There is hardly a trace of green out here, what little grass there is has been churned to mud or worn away by tramping feet laying unauthorised footpaths. Washing hangs listlessly on the balconies, stray dogs wander aimlessly, postmen deliver junk mail or unwelcome bills. Where people struggle day in day out to make ends meet, poverty reigns.

The hidden world of the less affluent is beginning to encroach on the "respectable" heart of the metropolis, albeit in its most extreme manifestation. Increasingly, the smart, tourist-frequented districts of Pest are being invaded by the homeless, the most visible emblem of a deeply divided society, of the yawning gulf that separates the well-off from the desperately poor, the "respectable" from the indigent. These men and women congregate in the Metro stations, stretching out over the garish plastic seats to snatch a few hours of respite, reeking of stale alcohol and sweat, wrapped in layer upon layer of second hand clothes. Some venture above ground, to Tram Line Two that ferries the inhabitants of the swish hotels along the banks of the muddy-brown Danube to sightsee at the Parliament building - the jewel in the crown of Pest. Bearing grubby ID badges, they attempt to eke out a subsistence from selling copies of Flaszter (the equivalent of The Big Issue in the UK), grinning at the fur-clad passengers, who politely ignore the gaps in their rotting rows of teeth.

Quality of life in modern Hungary

Two recently published studies chart the changes that have taken place in the last decade, revealing the state of the nation today. The first, produced by the Central Statistical Office (Központi Statisztikai Hivatal), examined the changing standard of living in Hungary [see Magyar Nemzet, 29 April, 1999]. Quality of life was gauged by looking at a number of factors, ranging from real wages to lifestyle. In 1988, the official monthly incomes of three groups, workers whose job consisted of physical labour, workers whose job primarily involved mental or intellectual activity and pensioners, averaged at HUF 7,640, 11,366 and 4,515 respectively. For 1997, the corresponding figures were HUF 42,419, 77,202 and 21,473. For the majority, disposable income was the fruit of paid work and high levels of taxation and other contributions acted as a deterrent to declaring actual earnings officially. The hidden economy continues to flourish, leading to involuntary distortions of reality in the statistics. This is most clearly revealed by discrepancies between the information concerning consumption and that concerning income. To put it in plain English, there are many Hungarians who live off the minimum wage officially, yet who enjoy a comparatively high standard of living. The life of statisticians is further complicated by the refusal of the better-off to divulge how much they make.

Amongst the various branches of economic activity, those who ended up in sectors where free competition became the norm fared worst (such as employees in the clothing and textiles industries and in agriculture), whilst their counterparts in monopolies and cyclically influenced industries (such as banks, telecommunications and petroleum) fared better.

The number of pensioners (generally regarded as the group in society most vulnerable to poverty) rose from 2.4 million in 1987 to 3.1 million ten years later, whilst payments of old-age and other pensions increased from HUF 40 billion in 1978 to HUF 805 billion in 1997.

Inflation (which hits lower income groups hardest) was at its most rampant in 1991, at a staggering 35%. In 1995, it reached 28.2% whilst this year it is expected to be cut to a less punitive single digit. Price increases have been most pronounced in the energy sector, with central heating costs rocketing by 77.6% in 1991 and electricity by 60.9% in 1995, although food staples have not been lagging far behind. The price of bread went up by 51.9% in 1991, by 44% in 1993 and by 25.9% in 1996. The most dramatic price hike for sugar was in 1993, when it became 42.7% more expensive.

Cautious optimism

The second major study was carried out at the behest of the Tárki Institute for Social Research (Tárki Társadalomkutatási Intézet Rt.), and covers a more limited period, namely April 1998 and March 1999 [see Magyar Nemzet, 4 December 1999 and 8 January 2000]. The authors (Zoltán Fábián, Tamás Kolosi and Péter Róbert) separated Hungarian society into several distinct groups according to levels of material and cultural consumption. 1-2% of the population was deemed to belong to the ranks of an elite, 8-9% to an affluent group, followed by two groups situated at or slightly above the average. The significant difference here was expressed in terms of material and cultural consumption, with the first group of 14% stock-piling material goods and the second (17%) accumulating cultural products and dubbed as the leisure-time oriented average. The fifth group (28%) is better off than the average as far as housing is concerned, but considerably worse off vis-a-vis material and cultural consumption, hence their classification as well-housed deprived. The remaining 31% is composed of the worst-off, the group of the deprived poor. The categories mask differences: deprivation in the study should not be understood as indicating absolute poverty. Of the members of the worst off group, 10% described themselves as living in hardship, whilst 31% admitted to experiencing material difficulties from month to month.

The findings of the study suggest, however, that inequalities in consumption are likely to decrease, provided that other factors contributing to social inequality such as education, distribution of income and employment structures do not serve to keep them in place. For the deprived poor there is hope of upward mobility.

As for consumer goods, some are more eligible than others to be classified as status symbols. More than nine tenths of deprived poor households have a fridge, for example. By contrast, although every elite household boasts a PC, the corresponding ownership figure for the deprived poor is 1%. Home internet connections remain the preserve of the elite (82%), whilst they are beyond the reach of the bulk of even the affluent and the material-hoarders of the average group.

Turning to the socio-demographic dimension, young people, the economically active and city dwellers are in a more favourable position than pensioners and other inactive groups and the inhabitants of small rural communities. The elite and almost half of the affluent have enjoyed the benefits of higher education, whilst over nine tenths of the deprived poor do not have the equivalent of A levels (the érettségi, which entitles the holder to university or college entrance depending on the marks attained). Over half of the elite live in the capital compared with the majority of the deprived poor who are concentrated in provincial towns.

38% of Hungarians consider themselves to be working-class and 52% middle-class. Only 8% see themselves as members of the "lower class" and 2% as upper middle-class.

Poverty itself was not felt to be the chief source of conflict within Hungarian society. Instead, the fact that some 60% scrape by at subsistence level, deprived of a genuinely disposable income was pinpointed as the most pressing problem, a result fully in line with the findings of another survey which calculated that, in 1999, only 44-45% of the population have any savings.

The Tárki study also probed into how satisfied people were with their income levels and what reference groups they used in assessing their relative well-being. One significant yardstick was comparisons with levels of income in the past. Whereas in 1992, overwhelming pessimism was the order of the day, with a pitiful 11% looking forward to an improvement, in 1999 18% expected their standard of living to go up. In seeking to determine whether they were indeed doing well, Hungarians looked to their immediate surroundings for reference instead of drawing comparisons with more prosperous groups. Past income, income of friends and relatives, the Hungarian average, level of education and professional skills also featured in deliberations. 10% included Western European standards of living as a reference for appraising their own. Here, the affluent, university graduates, businessmen, managers and the very young predominated.

Over a third of respondents felt that their standard of living had dropped continuously over the last ten years, 5% believed that an initial improvement had been followed by a deterioration, 15% thought that there had been no change, 22% that after a temporary change, things had settled down and remained steady, 14% felt that after a pronounced turn for the worse, a lasting improvement had set in and almost 10% had seen a continuous improvement. All in all then, almost a quarter of the population could be classified as the winners of the introduction of a market economy, and 40% as the losers. The most adversely effected groups are children (particularly young children) and families with three or more children.

In absolute terms, poverty (defined as an income of half the average) had not spread between spring of 1998 and 1999, hovering around 13%, and its depth (the percentage by which income drops below the poverty threshold) has eased slightly. The unemployed, badly qualified, dependents, women on maternity leave, provincial town dwellers, residents of Northern and Eastern Hungary, households headed by young men and Roma suffer most from poverty in addition to the young children and large families mentioned above.

Although cautious optimism would seem appropriate in the light of the above, I am still haunted by the evidence of what I see every day, from the headscarved women sitting in the stations with their babies in their arms, begging for a few coins, to the tales of woe I am constantly bombarded with from my acquaintances. Only time will tell as to which is the more accurate appraisal.

Gusztáv Kosztolányi, 15 January, 2000.

The sources used in this article were Magyar Nemzet, 29 April and 4 December 1999 and 8 January 2000.

Archive of Gusztáv Kosztolányi's Csardas series of articles on Hungary



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