MP majority backs an extra 1.7% minimum wage increase for next year

A majority of Dutch parliamentarians showed their support on Thursday for a proposal to increase the minimum wage by an additional 1.7 percent next year. That amount would be on top of the semi-annual adjustment that raises the minimum wage based on inflation rates in January and July. If the measure goes forward, it would be just the second time that such an additional increase would be made since the introduction of the statutory minimum wage in 1969. The first additional adjustment was made in January.

The proposal from the GroenLinks/PvdA won the support from D66, PVV, SP, ChristenUnie, Volt, Bij1, Denk, and the two independent MPs Liane den Haan and Nilüfer Gündoğan. The childcare allowance and the child-related budget will also increase, as well as benefits such as the AOW.

The measure will cost two billion euros. Companies will be taxed when they repurchase their own shares using their profits. The parties estimate this will yield 1.2 billion euros. The bank tax will also be raised, which is expected to result in an additional 350 million euros. Furthermore, income from assets and company stakes will face higher taxes, projected to generate an additional 450 million euros.

PvdA-GroenLinks and ChristenUnie initially proposed a 2.5 percent wage increase to 14 euros per hour, but it was settled at 1.7 percent.

Jesse Klaver, speaking on behalf of GroenLinks-PvdA during the budget debate, expressed his enthusiasm about the Tweede Kamer’s decision to raise the minimum wage. "Today, the Tweede Kamer show we can come together despite our differences and make provisions for all those who have been struggling to make ends meet for a long time. This will make it a bit easier to pay for groceries and rent,” he said.

ChristenUnie leader Mirjam Bikker also emphasized the importance of financial stability in the household. “Financial stress puts pressure on healthy living. You need to be able to make ends meet if you work, if you have teenagers eating you out of house, or if you're on your own. That's why today we're taking the first step in increasing the minimum wage. Because peace in the household budget means peace at the dinner table,” she said.

MP Pieter Omtzigt refrained from backing the proposals. He said he worries that high taxes on repurchasing shares might drive listed companies out of the Netherlands, resulting in lost coverage and the departure of these firms.