Wages will not rise any time soon, says Dutch central bank

It is unrealistic to think that wages will increase in the near future, according to an article in the Dutch central bank DNB's magazine the DNBulletin, Volkskrant reports.

According to the anonymous author, the Dutch labor market is much larger than just the unemployed people. Many people who already have a job are looking for more work or another job. Unemployment is seen as a measure of stress in the labor market. If the unemployment rate is high, there is no stress on the labor market and wages do not increase much. If the unemployment rate is low, there is a lot of stress on the market and wages rise faster.

In the last quarter of 2015 there were 587 thousand unemployed people in the Netherlands. But to get a real image of what the Dutch labor market looks like, the about 1 million people who already have a job and are looking for more work should be added to that, according to DNBulletin. Then there are the people who are not actively looking for work, but would like to have a job. "There are 131 thousand discouraged people who have given up their job search. In addition to that, a further 401 thousand people are not available immediately, but want to work." the author writes. "All together the underused work force - the sum of unemployed people, people that want to work more hours and the inactive people who want to work - is 3.5 times larger than the number of unemployed."

The author concludes that the "space on the labor market is underestimated" by looking only at the unemployment rate.