Minimum wage hike on July 1 will be higher than inflation; Minister wants to do more

The minimum wage in the Netherlands will rise by a higher amount on July 1 than previously anticipated. The legal minimum wage is adjusted every six months based on inflation. When that semi-annual raise is calculated, an additional 1.2 percent will be added, the Cabinet said in a statement released on Monday. Separately, Social Affairs Minister Karien van Gennip said, "The Netherlands should not aspire to be a low-wage country."

The actual rate will not be known for several months. “The amounts will be announced in the Spring of 2024. The higher minimum wage also affects benefits such as social assistance, AOW and UWV benefits,” the Ministry of Social Affairs and Employment wrote in a statement.

Currently, all workers are entitled to a statutory minimum wage of 13.27 euros per hour from 21 years of age. This was boosted by at least 3.75 percent compared to the previous year, though the rate paid largely depended on the number of hours an employer considered to be full time.

That changed on January 1, when the minimum wage rules were adjusted to be determined based on an hourly rate instead of a monthly rate. As such, it was no longer determined by an employer’s decision to make the full-time work week involve 36, 38 or 40 hours of labor.

Minimum hourly wages are still lower for people younger than 21. A 20 year-old worker can be paid a minimum rate of 10.62 euros per hour, while someone who is 19 can be paid 7.96 euros hourly. The fee scales down further to just 3.98 euros for a 15-year-old worker.

In response to a policy report analyzing the development of the population over the next 25 years, Van Gennip said that the Netherlands will be forced to make tough economic decisions to secure the future of the country. The policy advice presented to the Cabinet said that the Netherlands needs to aim for "moderate growth" in the total number of residents, considering the current aging population.

"I think we should look much more closely at whether economic activities contribute to the society we want to be," Van Gennip wrote. "We really have a problem if it is more attractive for employers to hire three employees from Eastern Europe than to invest in a robot. The Netherlands should not want to be a low-wage country. The benefits of cheap labor belong to the employer, while society bears the burden."

The CDA politician said that the economic system needs to become fairer, and that the market alone should not determine the future as it pertains to wages and economic growth. The caretaker minister said that the next Cabinet will be forced to study the report to determine how to move forward on a wide range of employment policies and social affairs legislation.

She called on the next Cabinet members "to determine an expeditious course" by working with legislators and other stakeholders to find compromises and common ground.