To achieve an acceptable living standard or to improve their modest circumstances, most Hungarians had to work hard often they held more than one job. Continuing inflation in the 1980s created additional pressures on families with moderate income. Although the government introduced the five-day workweek throughout the economy between 1980 and 1985, more persons worked extended workdays to increase household income. It was estimated that three families in four had some source of additional income not resulting from work in state or collective sources. Many families were thus able to achieve a comfortable, if still modest, life-style.

A number of disadvantaged groups also tried to make ends meet. Western analysts estimated that between 25 and 40 percent of the population lived below the poverty level, which, in the mid-1980s, was defined as a monthly income below 5,200 forints (for value of the forint--see Glossary). Average monthly wages (6,000 forints) were only 10 to 15 percent above this level. In 1988, according to data issued by the Central Statistical Office, between 1.5 million and 3 million people qualified as "socially poor" (out of population of 10.6 million). These figures included 40 to 50 percent of all retired persons on pensions, about half of families with two children, and from 70 to 90 percent of families with three or more children. Other poor groups were lowpaid employees of the state and industry, such as postal employees, various semiskilled and unskilled workers, and minor bureaucrats. Some of these people supplemented their income through second jobs. Single heads of households were often poor. In addition, persons working on less productive collective farms and those living on isolated homesteads (tanyas) far from rural centers and even villages, were likely to have scanty incomes.

Although Hungary's living standard was higher than that found in neighboring socialist states in the 1980s, the sharp disparities became the subject of investigative reports, letters to newspaper editors, and various radio and television talk shows. Economic problems were clearly causing concern and some demoralization among the people. The government adopted a variety of austerity measures in response to the country's economic stagnation and staggering foreign debt. These measures included increases in the prices of basic items, such as flour, bread, gasoline, and household energy, and various consumer items such as cigarettes. A new value-added tax (see Glossary) on most goods and services and a stricter income tax law were also introduced (see Economic Regulators , ch. 3). In 1988 official sources reported an inflation rate of 17 percent. Western analysts estimated that the inflation rate could be as high as 25 to 30 percent. By 1989 the average real wage had dropped to its 1973 level.

Since the mid-1970s, considerable tension has emerged between the rich and the poor, partially because of the long-pcc2 -professed egalitarian views of the regime. During the immediate postwar period, the leadership had advocated (although it had never fully practiced) a general egalitarianism that, combined with the prevailing scarcity, led people to elevate self-denial as a socialist virtue. When conditions subsequently improved, the leadership and the population both were confused about what form the proper socialist way of life should take. The younger generation in particular took pleasure in the increasing comforts of life, but some members of the older generation feared a resurgence of a "bourgeois" life-style and "consumerism." Although poverty remained widespread, socialism's sponsorship of rapid economic development had offered many persons a chance to change their way of life and socioeconomic position in a manner that was unimaginable before the war. As living standards improved, the conviction had grown among significant segments of the population that economic growth and rising standards were inevitable and that ongoing problems--poverty and unequal opportunity--were remnants of the old order, certain to be overcome. Then in the mid-1970s, economic growth had slowed. Although inequalities were much reduced from the prewar scale, they still existed. They were less pronounced in salary differences than they were in working conditions, working hours (including their flexibility), housing conditions, possession of durable consumer items, and, most of all, general life-style. Even more troubling was the appearance of new inequalities, with favored groups consolidating their advantageous positions. The regime had few concrete answers for these problems. Leaders could only point out that the country had no models to follow in developing a socialist system to meet its needs.

In the late 1980s, the worsening economic conditions were a disappointing contrast to the successes and significant improvements in living standards achieved in the 1960s and 1970s. In 1987 the official news agency estimated the number of unemployed persons to be 30,000 to 40,000. In 1988 the press began reporting frankly on the noticeable numbers of beggars and homeless persons on the streets of Budapest. The media also noted that squatters were becoming a problem, especially families coming from the countryside seeking employment and moving into vacant apartments.

Data as of September 1989