by Jakab Andor
andorjakab.blog.hu

I could hire
12 people with €760 net salary, but I don’t. I’ll 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 a day, weekdays only. 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’ll 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 wanted to. If I had the right, and she answered, she
could deliberately deceive me 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 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 whiling away her long holiday years.
But not only couldn’t I 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 the whole time. When a woman comes
back from maternity leave, I would be legally forced to increase
her salary to the present level in her position. Also, I would be
required to give out her normal vacation days, that she accumulated
during her maternity leave. When she finally comes 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. Since I don’t have the right to fire them, 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. The only way this 2x state multiplier could
be lower, is if I pay a lower salary. But I wouldn’t hire you for
less money, because I think you couldn’t make a decent living for
less then €760. 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 sum.

It’s only Hungary
that is so fucked up:

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

I would also
have to take into consideration that a 35 years old person is entitled
25 days of vacation per year. This means 1 extra month where someone
else has to do step in. If I needed 12 peoples’ labor, I would have
to employ 13 to account for the one who’s on vacation at any given
time.

But I would
still give you a job despite everything stated previously.

I am a braveheart
entrepreneur. Entrepreneurs take risks, so I would sell my apartment
and move to a rented flat. I would hope that the €90,000 from
the sale will be enough. I would launch my business bravely, and
if I didn’t succeed (quite likely with startups) I wouldn’t be a
crybaby.

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

The company
couldn’t possibly sell more than 1000 hours / month of billable
service in the average month. So to break even, making enough income
to cover my costs, I would need to set my pricing at €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.

I am not greedy,
and 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 optimistic person. Our marketing would kick ass,
my plans would work perfectly, we would succeed at 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 €1,229 profit before taxation. Out
of the company profit, I would pay €122 corporate tax, and
the local business tax, 2% of company income, which is €600.
At the end, the company would have €507 per month left in its
bank account to keep.

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, and my wife would
also make money. I wouldn’t even have the time to spend much, because
unlike my employees, I would work 12 hours every day, 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
a strong urge 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, illegally, under really crappy circumstances,
   charging only €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 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 on 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 others charge €9,
   I would be an enemy of the nice Hungarian people, while others
   work honestly for a 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 away by
   lying that they will get the same value and quality of service,
   but at a fraction of the price. After they stole enough clients,
   they would deliberately cause a great deal of harm to my company
   to get themselves fired. Then they would then go to court, stating
   that I fired them illegally, and they would win the case. In the
   meantime, they would happily work 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, telling
   everyone they have worked for my company, they know what they’re
   talking about. Not only is my service very expensive, but the
   quality is a piece of crap too.
4. Complaining
   about all this wouldn’t help, no one would give a flying fuck.

So this is
basically why I don’t give anyone a job. And I think a lot of other
entrepreneurs who have experienced starting a business, will also
not give jobs because of these issues. And this is why more and
more people are jobless, who buy fewer and fewer things, which means
they pay less VAT. And this is why there are fewer and fewer decent
companies, who hire less employees, who pay less taxes, so there’s
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 you a job if:

1. I can fire
   you, when and if I want to.
2. If VAT goes
   down to at most 20%, but 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 change, I won’t give a job. Until the state ferrets out corruption
in every possible aspect, I won’t start a business, and I won’t
create jobs.

This is
a translation of the original Hungarian post, “To”lem
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. HUGE thanks go to Spencer
Rathbun for helping me out with the English txt.

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.

January
13, 2012

Jakab Andor
[send him mail] blogs at andorjakab.blog.hu.

Copyright
© 2012 Jakab Andor