Wealth gap increasing in Dutch cities

Picture: Wikimedia Commons/Anneli Salo. (Picture: Wikimedia Commons/Anneli Salo)

Despite the fact that cities are the engine behind the Dutch economy, the wealth gap in cities only increased in Dutch cities over the past years, according to the Netherlands' environmental assessment agency PBL in a report titled "The divided triumph of cities'.

Over the past 25 years, the number of jobs in Dutch cities increased by 30 percent, compared to 20 percent in non-city areas. Amsterdam and Utrecht in particular showed a strong growth in jobs. Cities also have many high paying jobs.

But while the economy is improving, the gap between rich and poor in cities is also increasing. Over the past years, the wage difference between the highest and lowest earners increased by 3.5 percent in Dutch cities, even by 4 percent in Amsterdam.

According to PBL, the wealth gap in Dutch cities is widening, because wage increases at the top is stronger than at the bottom, and not because the bottom is falling away. This means that workers at low-paid jobs also benefit from living in the cities. For example, in the Amsterdam metropolitan area, low-paid work in the hospitality or retail sector pays 4.5 percent more than the same work in rural areas.

The growing gap between rich and poor is also reflected in how they are spread out within the city. Low-paid and unemployed people in particular are increasing living close to each other and mixing less with other groups. This is also true for highly-paid people, but to a lesser extent. In most cities the highly paid live together in the same neighborhoods. But in Amsterdam and Utrecht this group is slowly spreading across the city. According to the PBL, this can likely be attributed to the pressure on the housing market in these cities.

Internationally seen, the economic inequality in cities is still relatively small in the Netherlands. The wealth gap is only smaller in the Nordic countries. If the government wants to reduce the inequality, the PBL advises they focus policy on the financial and employment situation of the underprivileged. The PBL believes that this will be more effective than physical interventions, such as improving accessibility or demolishing and reconstructing. "These interventions may be able to improve the environment, but usually not the position of the original inhabitants. A combination and area focused education- and labor market policy therefore seems more sensible."