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Hungary Added a ‘Slave Law’ to Meet Labor Shortages. It’s Not Working So Well.

Category: Business,Finance

“This is a carte blanche to say, ‘I’m offering my people on the labor market, You can exhaust them as far as you wish, the regulation is there,’ ” said Miklos Ligeti, the legal director of the anti-corruption group Transparency International Hungary.

Mr. Orban’s current stance is an about-face from earlier in his political career. In 2007, he said that Hungary would need at least four million immigrants to make up for all the young people who were leaving the country. In the past few years, Mr. Orban has burnished his political fortunes by taking a hard line against the flood of immigrants entering Europe.

He has consolidated his grip on the economy as well, in part by cultivating a network of oligarchs who run media, retail, construction and other industrial companies. To the extent the slave law gives employers more flexibility, it could prove helpful to that loyal cadre of businessmen.

Waves of skilled young Hungarians continue to migrate to Austria, Britain, Germany and other European countries. About 350,000 Hungarians, around 5 percent of the working population, are working elsewhere in Europe.

“There is a big paradox of out-migration,” said Thomas Sobotka, a researcher at the Wittgenstein Center for Demography and Global Human Capital in Vienna. “Orban spends a lot of energy ‘fighting’ against immigration. But the key reason Hungary is shrinking is because each year tens of thousands of Hungarians leave the country.”

Diana Goncz, 35, grew up in Kutas, a small village a few hours drive from Budapest, where she lives now. The big employers nearby were a meat factory and a sugar processor. Like so many young Hungarians seeking opportunity, she and her sister, Patricia Lilla, 32, left for a bigger cities.

Ms. Lilla, frustrated by what she considered Hungary’s corruption and stifling bureaucracy, finally gave up and left the country. She now lives in Berlin with her children and husband, who found a job in advertising.

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