Most substantial increase in collectively bargained wages in 40 years

Workers in the Netherlands have seen their collectively negotiated wages increase by an average of 6.1 percent in the last year. According to Statistics Netherlands, this is the highest rise in over 40 years. Yet workers in 2023 had a smaller part of their salary left over than a year earlier due to further rising inflation.

Government agencies, in particular, have tried to compensate their employees as best as possible in 2023 for the sharply increased costs of groceries, and other items. Thanks to better collective labor contracts at municipalities and the government, workers in this sector received an additional 7 percent to counteract the consequences of inflation. Price increases became increasingly higher, especially in 2022 and early 2023, due to the consequences of the war in Ukraine. Inflation has now cooled down.

In 2022, collectively agreed wages had also historically risen sharply, by 3.2 percent. That percentage was almost doubled last year. According to Statistics Netherlands, collective labor agreements rose faster in every quarter of the past two years than in the three months before. In the last three months of 2023, collective labor agreement wages increased by just under 7 percent compared to a year earlier.

Due to the significant inflation, workers will also had less of their salary left in 2022, despite the substantial increase in collective labor agreement wages. The so-called realistic wage development then amounted to a minus of approximately 6 percent, based on the inflation figures for the first eleven months of 2022. Statistics Netherlands does not yet have the inflation figure for December, but based on a provisional calculation, people in the Netherlands kept an average of more than 2 percent less of their salary despite their increased wages.

In addition to civil servants, employees in the transport and storage sector also improved above average, with an increase of 8.4 percent. This increase mainly occurred among transport companies and some collective labor agreements in the aviation industry. At housing associations, among others, the wage increase was disappointing, with a plus of 2.5 percent.

According to the employers' association AWVN, which tracks the monthly collective labor agreement increases the most substantial growth has now ended. A decline has started since the summer, which was briefly interrupted in October with an average wage increase of 8 percent. However, this may have been a final outlier due to decreased inflation and the deterioration of the economy.