Most Dutch people want wage increases to cover inflation

A majority of the Dutch public believe employers must do more to combat decreases in purchasing power. More than 60 percent of people believe that employers should allow wages to rise in line with inflation, according to survey conducted by ANP and Kieskompas.

In the past year, residents of the Netherlands have seen purchasing power deteriorate considerably on average. Wages covered by collective bargaining agreements rose by an average of 3.2 percent last year, significantly less than consumer prices which rose by about 10 percent during 2022.

Across the board, more 60 percent of people in the Netherlands who are 18 years of age or older agree that wages should grow with inflation. In fact, a quarter of the respondents said they strongly agree with the concept that employers should correct inflation for their employees. About 20 percent disagreed with the idea, and 20 percent had no definite opinion either way.

The survey shows that voters for left-wing parties in particular think that employers should at least tie pay raises to inflation. This opinion is most widely shared among voters for the socialist faction SP, with more than 80 percent in favor of an inflation correction. That percentage is also high among GroenLinks and PvdA voters, at about three-fourths.

Among voters of the more conservative CDA and VVD parties, that percentage is significantly lower. Still, about half of them still believe that employers should allow wages to rise accordingly.

In recent months, several professional groups have temporarily stopped their work in protest against wage increases that were too low to make up for record high levels of inflation. Last week the city cleaning workers in the municipality of Utrecht went on strike, and regional transport employees have also been on strike in various locations this week.

In both sectors, the unions did not agree to the wage increase proposed by the relevant association of employers. At the end of December, Dutch central bank president Klaas Knot already called on employers to pay out broader, more significant wage increases. He referenced an average increase of 5 to 7 percent. However, the central bank disagrees with labor union FNV.

The financial institution believes automatically correcting wages with the inflation rate is not a good idea. This can lead to a wage-price spiral, where wage increases cause prices to rise further, which then triggers more wage increases, and so on. Effectively, it means a scenario where pay raises continuously push inflation higher.

The survey was conducted between January 25-31, and was completed by a representative group of nearly 5,000 people in the Netherlands.