The increase in wages lagged behind inflation last year. According to preliminary figures from the Central Bureau of Statistics (CBS), wages rose by 2.1 percent in 2021. In 2020 this was still 2.9 percent.
According to the most recent data, daily life was 5.2 percent more expensive in November last year than a year earlier. Statistics Netherlands cannot yet provide an average for the whole of 2021, but in the first 11 months consumer prices were on average 2.4 percent higher than in the same period a year earlier. This means that wage increases are lagging considerably, much to the dissatisfaction of the trade union FNV, among others.
The prices that the Dutch pay for goods and services had not risen so sharply since September 1982.
For this year, the wage increase is expected to be slightly higher than last year. But even now a big leap is probably not in it, economists from ING and Rabobank expect.
Due to the sharp rise in inflation, the purchasing power of the Dutch will probably remain under considerable pressure this year.
Wage development not yet up to last year’s level
ING economist Marcel Klok expects a 2.4 percent increase in collectively agreed wages for the new year. That is therefore a small improvement compared to the figures for 2021 released by Statistics Netherlands. Klok points out that unemployment is currently very low and that the labor market is tight. That is why many employers have to raise wages a bit more if they want to find enough suitable staff.
Nevertheless, the economy is still hampered by the corona crisis. That is why Klok thinks that wage developments this year will not turn out as strongly as just before the crisis. According to him, the Netherlands will probably not return to that level until a year later. This means that inflation will be even higher than wage growth for the time being. Klok points out that the recent strong price increases are mainly caused by the soaring energy prices. This is expected to be a temporary phenomenon, but for the time being this will affect consumers’ wallets.
Elwin de Groot of Rabobank thinks the same way. He also expects wage growth to increase slightly this year. But not very much, he adds. Many companies have also had a lean period as a result of the crisis and will probably point this out in the collective labor agreement consultations. Also read: High inflation in 2022? This is what you keep net if you earn €40,000 to €80,000 and your gross salary increases by 2% to 4%
De Groot also does not rule out the possibility that consumer confidence will come under further pressure due to the high inflation. This could also lead to a slowdown in economic growth in the long run.At that time, inflation fueled strong wage increases, which in turn pushed inflation up further. De Groot says that the circumstances were different then. At that time, for example, it was more difficult for companies to recruit workers from abroad. And then, according to the economist, the unions were even more powerful. Since then, union membership numbers have declined. Sectors have also been added in which the unions are less well represented.
Vanbond FNV wants to link wages to inflation figures
According to the trade union FNV, employees are tired of having to renegotiate every year about the inflation adjustment and the preservation of their purchasing power. Petra Bolster, member of the daily board of FNV, points out that employees are now deteriorating. “To prevent this, we demand that wages automatically increase in line with prices. This must be laid down in the collective labor agreements,” she says. In doing so, she refers to the intentions announced in September for the collective labor agreement negotiations, in which the union already put this requirement on the table.
Employees covered by a collective labor agreement benefited the least in the catering industry last year. In that sector, collectively negotiated wages rose on average by only 0.3 percent, since only the wage tables there have been adjusted for the development of the statutory minimum wage. This is because the catering collective labor agreement has been extended by one year in 2021 under the same conditions. Most employees in the catering industry therefore received nothing at all.
Read about the inflation figures also:
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- High inflation here to stay or not? These are the main arguments for and against.