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This is why I don't give you a job (A Hungarian businessman explains high European unemployment)
Andor Jakab Blog ^ | 01/09/2012 | Andor Jakab

Posted on 01/09/2012 6:47:09 AM PST by SeekAndFind

I could hire 12 people with €760 net salary, but I don't. I tell you why. You could work for my service provider company in a nice office. It's not telemarketing, it's not a scam. You would do serious work that requires high skills, 8 hours daily, only weekdays. I would employ you legally, I would pay your taxes and social security. I could give such a job to a dozen people, but I will not, and here I explain why.

I wouldn't hire a woman.

The reason is very simple: women give birth to children. I don't have the right to ask if she still wanted to. If I had the right, and she would answer, she could deceive me deliberately or she could change her mind.

Don't get me wrong, I don't have any problem with women giving birth to children. That's how I was born and that's how my child was born. I wouldn't hire a woman because when she gets pregnant, she goes for a 3 years maternity leave, during which I can't fire her. If she wants two children, the vacation is 6 years long.

Of course, work has to be done, so I would have to hire somebody who works instead of her while she is spending her long holiday years. But not only I couldn't fire her while she's away, I couldn't fire her when she comes back either. So I would have to fire the one who's been working instead of her for the whole time. When a woman would come back from the maternity leave I would be legally forced to increase her salary to the present level in her position, and also, give out her normal vacation days, that she has collected during the maternity leave. When she would come back to work, she would start with 2-4 months of fully paid vacation.

I wouldn't hire people over 50 either.

Not that I have any problem with the most experienced professionals. I wouldn't hire them, because they are soon in the protected age. And then I would be trapped with them, similar to the trap with employing women. You can't fire people in the protected age, so I would have to pay the salary and its total cost even if he or she doesn't work well or at least up to acceptable standards. I couldn't fire the protected employee, but someone would have to do the  job right, so I would have to hire another person. It's all right with me if they're protected, but then I won't hire them.

I would only hire 25-50 years old men.

They're also risky to hire, because I don't have the right to fire them either, if for any reason (I don't have enough income, or I don't like how they work) I want to. There's a high risk that they will go to court, and there's a high chance they will win. But this risk I would be prepared to handle.

You would cost me €1572.

Your Net Salary:  Your Gross Salary:  My Total Cost:  State markup:
 € 185  € 238  € 306  165%
 € 227  € 306  € 393  173%
 € 322  € 458  € 589  183%
 € 408  € 612  € 786  193%
 € 479  € 765  € 982  205%
 € 570  € 917  € 1178  207%
 € 760
 € 1223  € 1572  207%
 € 950  € 1529  € 1965  207%

This is actual 2011 data from the www.nettober.com  salary calculator. As you can see, your €760 salary would cost my company €1572. This 2x state multiplier could only be lower, if I would pay less salary. But I wouldn't hire you for less money, because I think if you made less then €760, you couldn't make a decent living. You would become depressed, destroy your own life, my company and even me. So, I am not willing to hire anybody for less than this.

It's only Hungary that is so screwed up:

This chart is from a Deloitte study. As you can see, the state doesn't take away more than half of your salary anywhere else. It's annoying that I pay you more than €1500, but you only receive less than half of it. Especially, because you will not get any better medical care than anybody registered with a minimum wage.

I would also have to take into consideration, that a 35 years old person is entitled 25 days of vacation per year. That means 1 extra month of working days. If I needed 12 persons' work, I would have to employ 13 to account for the one who's on vacation.

But I would still give you a job despite all of the above.

I am a braveheart entrepreneur. I would sell my apartment, and I would move to a rented flat. I would hope, that the €90,000 that I would make this way will be enough. I would launch my business bravely, and if I didn't succeed (that is quite likely with startups) I wouldn't be a crybaby.

My company would provide an excellent service, and it's impossible to provide without decent working conditions. I would employ 13 people. I would constantly need 12 persons' work, plus the one who works instead of the one on vacation. 14 people including me would work in the 158 sqm nicely furbished, comfortable office. This would cost 10 €/sqm/month rent, and 3,5 €/sqm/month utility fees, a total of 2133 €/month.

These would be my monthly expenses:

Office: € 2,133
Wages: 13 x €1572 = € 20,436
Other expenses (accounting, marketing, etc.): € 3,058
Total: € 25,627

Pretty scary for monthly bills isn't it? This is how much I would have to pay out every month, regardless of my income. In the good months, and the bad months too. In the summer low season, and before Christmas when we do much less work.

This company couldn't possibly sell more than 1000 hours / month of billable service in the average month. This means, that to break even, in order to make enough income to cover my costs, I would need to set my pricing €25,627 / 1000 = €25 / hour. But breaking even isn't enough, I would also need some profit.

I am not greedy, the market is tough too, I would markup my prices with 20% profit. This would increase my hourly rate to €30, that is pronounced as thirty Euros plus VAT, €37,5. I would round this sum (down), so our customers would pay €37 / hour for our service.

Out of this €37, 7 would go directly to the state, 30 would be company income. I am an optimist person. Our marketing would kick ass, my plans would work perfectly, indeed we would succeed selling an average of 1000 hours of service monthly. Business would fly, I would be lucky with all my employees, everybody would work like a charm.

This would generate 1000 x €30 = €30,000 company income.

€4,373 would be profit. I could pay €2,446 gross salary to myself, that would cost my company €3,144. Out of that, €1,521 would be my net salary, almost the double of what my employees make, and the company would make €948 profit before taxation. Out of this, I would pay €95 corporate tax, and the local business tax, that is 2% of company income, that is €587. At the end, the company would have €266 left, this is how much my company's capital could grow per month.

So I would make €1,521 per month, but don't forget, that I sold my €90,000 apartment, and I invested it in the company. So I would have to rent a flat for at least €300, otherwise I would become homeless. I would live a modest life, wouldn't spend a lot, my wife would also make money, I wouldn't even have the time to spend a lot, because unlike my employees, I would work 12 hours even on the weekends.

This way I could save €900 per month, so my €90,000 investment would return in 100 months. It would take 9 years to recover the money that I invested in the company, so I could buy myself an apartment again. From then on I wouldn't have to live on a tight budget, I wouldn't have to pay rents, and wouldn't have to save either. I would live like a European.

Under these circumstances - I hope it's understandable - I don't feel strongly urged to sell my apartment and invest the money into a new company. But for 4 reasons I will definitely not do it.

  1. The competition sells the same service, but illegally, under really crappy circumstances, charging €9 per hour. They simply pocket the money, without even issuing an invoice, it doesn't even include the VAT. They don't have to take any responsibility, there are no warranties, they officially don't even do anything, there's not even an official, legal trace of their existence. They don't have to rent an office, hire an accountant. By doing this 5 hours a day, they can easily make €1,000. They would point their middle fingers to my €760 job offer, where they wouldn't be allowed to do crappy work, but show up in time every day and meet very high professional standards in their work, they wouldn't be allowed to defraud the customers, and if they did, they would be fired.
  2. The competition would do smear campaigns against my company. I would have to face anti-capitalist propaganda, I would be seen as a greedy asshole who charges €37 for what they charge €9, I would be an enemy of the nice Hungarian people, while others work honestly for the fraction of my price...
  3. Many of my employees would only come to work for me to learn my business secrets and to steal my clients. They would lure them by lying that they will get the same value and quality of service, but at the fraction of the price. After they stole enough clients, they would deliberately cause a lot of harm to my company to get themselves fired. They would then go to court, stating that I fired them illegally, and they would win the case. In the meantime, they would of course work happily for the stolen clientele, that has cost me a fortune to build up. And of course they would be offended. They would trumpet on all kind of forums, that they have worked for my company, they know what they're talking about. Not only it is very expensive, but the service is a piece of crap too.
  4. Complaining about all this wouldn't help, no one would give a damn.

So this is why I don't give a job. And I think a lot of other entrepreneurs who have experienced it, will also not give a job because of this. And this is why more and more people are jobless, who buy less and less things, so they pay less and less VAT. And this is why there are less and less decent companies, who hire less and less employees, who pay less and less taxes, so there's less and less state money for social aids, and this is why social aid is about to come in the form of concentration camps.

I will only give a job if:

  1. I can fire you, if I want to.
  2. If VAT goes down to at least 20%, better yet 15%.
  3. If the state takes away "only" 30% of your money.
  4. If higher income is not exponentially punished.
  5. If the state punishes corruption instead of decent companies.

Until these things don't change, hell I don't give a job. Until the state promotes corruption in every possible aspect, I don't start a business, and I don't give a job.

 

---

This is my translation of the original Hungarian post, "Tőlem ezért nem kapsz munkát" posted on the 27th of July, 2011.  Although it rocked the Hungarian blogosphere - generated more than 90,000 Facebook likes - nothing has changed for the better. On the contrary. It's a whole lot worse now. To all of you international readers, here €760 net sounds like a dream salary for most people. Even medical doctors make less than half of this, at the beginning of their career. Prices on the other hand are the same as everywhere else.

---

Follow-up: "I don't give a job. Am I being antisocial?" - My apology to those who got really upset after reading the first few paragraphs.



TOPICS: Business/Economy; Society
KEYWORDS: hiring; job; unemployment

1 posted on 01/09/2012 6:47:19 AM PST by SeekAndFind
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To: SeekAndFind

bttt


2 posted on 01/09/2012 6:54:49 AM PST by petercooper (2012 - Purge more RINO's.)
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To: SeekAndFind

WOW!

Hope Rush touches on this today on his program.


3 posted on 01/09/2012 6:57:08 AM PST by libertarian27 (Check my profile page for the FReeper Online Cookbook 2011)
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To: SeekAndFind
...also, give out her normal vacation days, that she has collected during the maternity leave. When she would come back to work, she would start with 2-4 months of fully paid vacation.

Wow ... full vacation for 3 years, and when she gets back from her 'vacation'; she has accrued another 2-4 months vacation!? And then we wonder why countries like Hungary and Greece have problems .... Too bad we can't send Obama to "help them out".

4 posted on 01/09/2012 7:00:59 AM PST by Hodar ( Who needs laws; when this FEELS so right?)
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To: petercooper

Europe, where bureaucracy is doing everything it can to strangle business.


5 posted on 01/09/2012 7:05:27 AM PST by canuck_conservative
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To: Hodar

Zero is helping them out. He is sending them checks from our check book.

Our account is held at the bank of China.


6 posted on 01/09/2012 7:06:07 AM PST by cableguymn (Good thing I am a conservative. Otherwise I would be forced to support Mittens like Republicans do.)
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To: libertarian27

WOW is right!


7 posted on 01/09/2012 7:10:49 AM PST by GOPJ (Democrats are using immigration deliberately to change the electorate.. Freeper Williams)
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To: SeekAndFind

How ironic that with those incredible maternity benefits you still can’t get Europeans to reproduce at replacement levels.


8 posted on 01/09/2012 7:12:43 AM PST by married21 (As for me and my house, we will serve the Lord.)
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To: SeekAndFind

Excellent example of how government regulations creating more legally protected classes of people results in hurting both potential employees and employers. Thanks for posting.


9 posted on 01/09/2012 7:17:28 AM PST by ReformationFan
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To: SeekAndFind

Thanks for sharing this. Companies in the US face similar challenges, and the libs are teaching our kids to hate everything corporate, especially profits.


10 posted on 01/09/2012 7:19:40 AM PST by Mich Patriot (I am not worried about the deficit. It is big enough to take care of itself. Ronald Reagan)
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To: GOPJ

Read the bloggers next entry (linked at the bottom of the post here)

WOW - WOW - WOW

This needs to go viral!


11 posted on 01/09/2012 7:19:57 AM PST by libertarian27 (Check my profile page for the FReeper Online Cookbook 2011)
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To: Hodar; SeekAndFind

Thanks, for the insight. :-)


12 posted on 01/09/2012 7:20:51 AM PST by skinkinthegrass (I can take tomorrow, $pend it all today. Who can take your income, tax it all away. Obama Man can. :)
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To: SeekAndFind

A marvelous article - thanks for posting it. And thanks to the man who wrote it. Really eye opening.


13 posted on 01/09/2012 7:31:02 AM PST by dagogo redux (`)
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To: SeekAndFind

Ah luuv thees gy!

I wonder if he’s interested in a job over *here*. Like, say, Secretary of the Treasury? :-)


14 posted on 01/09/2012 7:38:37 AM PST by Nervous Tick (Trust in God, but row away from the rocks!)
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To: Pan_Yans Wife

Ping. Read the follow-on article linked at the bottom as well.


15 posted on 01/09/2012 7:38:44 AM PST by Pan_Yan
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To: All

In my method, I don’t even pursue 1040-type employment. Here’s why:

1) a 40-hour work week means I will either be over worked, or under worked. Under-worked sounds good to some people - but at some point you’ll be fired (It only makes sense). In essence, people will “Look Busy” to avoid being laid off. “Looking Busy” is tantamount to theft.

2) Not a lot of people realize this, but if you (I) get paid $1000 a week, Then I have to provide more than $1000 a week profit. Keep in mind, the employer needs to make not only my pocket money, but tax money and benefit money. That can be up to $1500 a week. Now I have to make sure I allow profits of about Twice my weekly paycheck. If I’m fired, I’ll take it personally - But most of the time good workers are fired just because they don’t make the company more money than they cost.

So I chose to “open my own business”. I do the same thing I used to do, and I still justify my costs very carefully. I do this as a 1099 Consultant:

1) Since I have to perform a task, That task is performed be it in 5 hours or 55 hours.

2) I don’t stick around and “Look busy” anymore. There are no cigarette breaks (I am a smoker) and there is no waste.

3) My rate is higher than the hourly take of an employee, but my cost to the employer is basically the same. Again, working on the same numbers I can easily help the employer control profit margins.

4) I can say no to work that doesn’t pay, if I wish. I usually don’t wish, because as an added benefit - I actually respect my bosses, and they respect me. This is a priceless benefit to getting up early everyday, and going to bed late everyday.

5) I now have the opportunity to seek other employment. This means that if one employer is “Hit by a bus”, or something comes around that knocks them out of business, I haven’t lost “everything”. Only a portion. The more clients I have, and the quicker I perform my daily tasks, the less pain I’ll suffer if something goes wrong. I have given years of service to companies, only to be let go on a friday because of something my department didn’t even cause.

6) I take care of my own expenses. I shop for health insurance about 3 times a year, and I control those costs actively. I have made sure to build up enough business that I can do from home should I ever get in an accident, need to move to temporary shelter, or the weather is too bad to commute.

The benefits are vast. Being an employee is a terrible decision in today’s world. It works for neither person. When you operate as a consultant you find yourself working on the same level as your employers, and they will share with you details that will affect your employment well into the future. I have about 80 clients, and each regards me as a partner in their business strategy. This is why I love waking up in the morning these days.


16 posted on 01/09/2012 7:47:41 AM PST by Celerity
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To: SeekAndFind
Very well explained, and not too difficult for a quick read.

Proves the point that the socialist world consists of only deceit, envy and theft, it's all they have.

17 posted on 01/09/2012 8:24:51 AM PST by Navy Patriot (Join the Democrats, it's not Fascism when WE do it. (plagiarized))
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To: SeekAndFind

Evidently, when he posted this utter brilliance on his blog, he was assailed by 90% hostile posts.

I would love to see the sweet nothings people could POSSIBLY post about this bottom-line sanity.

Leave it to a Slav to put it into starkly realistic, sensible terms. I am recalling Dubcek, Walesa, Havel, Wojtyla, Pasternak, Solzhenitsyn, and now... this guy. May his name become a household word, too. And may his critics simply become the householes that they are.


18 posted on 01/09/2012 8:51:46 AM PST by Migraine (Diversity is great; until it happens to YOU.)
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To: cableguymn

Code be worse: we can have this insanity here,if Dems/Occupy have their way. Thats why they want 20bucks for Unemployment in their liberal dream 80% of population will be unemployed.


19 posted on 01/09/2012 8:59:13 AM PST by alex2011
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To: Celerity

I’m right there with you. I am happy to say I just dumped my one customer that paid me the least.

I replaced them with someone more than happy to pay TWICE the per mile rate the one I dumped was willing to pay.

I have 3 others.

I am but one guy, a 1 ton van, fuel card, and my own operating authority.

I give the companies what they want, quality service. Once their load is in my truck they don’t have to worry. I am paid MORE than their contracted drivers. But I still get their loads.


20 posted on 01/09/2012 9:37:06 AM PST by cableguymn (Good thing I am a conservative. Otherwise I would be forced to support Mittens like Republicans do.)
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To: SeekAndFind

I worked in Holland for a little while and experienced similar complaints among entrepreneurs and would-be entrepreneurs.


21 posted on 01/09/2012 10:40:50 AM PST by jjm2111
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To: cableguymn

Fantastic ! Good to hear. Not only is providing a better service easy, but the pay-off is immediately seen. This makes a good life, one of morality and responsibility, suddenly “Cool”.

And if you have a spouse that needs to be sold on your idea, then the best way is to simply prove that you can do it. I have proven with my wife that I can be trusted. Now when I embark on any plan, I have her complete trust. I did this not with fancy words, but by showing her that I have the drive to do it and get results.

If your spouse fights you on your ideas to start a business, that means they don’t trust you. And that’s not their fault.


22 posted on 01/10/2012 8:43:56 AM PST by Celerity
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