Higher wages, lower inflation mean workers have more to spend

In January wages in the Netherlands' business sector increased by 3.4 percent - the biggest increase in ten years. At the same time, price increases slowed down, leaving workers with more money to spend on balance, NOS reports based on figures from Statistics Netherlands.

For comparison, over the whole of 2019, wages in the business sector increased only 2.4 percent. These wage increases were barely noticeable due to inflation. Food and beverages in particular were more expensive, due to the increase in the low VAT rate. Energy bills were also higher because energy tax was increased.

This year will be easier on the wallet, as there were no tax increases that affect consumer prices and electricity has become cheaper, the stats office said. Inflation dropped from 2.8 percent in December to 1.7 percent in January.

As inflation is lower than the wage increases, the expectation is that most workers will see an improvement in their purchasing power.

Last month Nibud calculated that working parents will see the biggest increase in their purchasing power this year, thanks to more generous child-related benefits. The purchasing power of non-working people, people on welfare, and people with only a state- or small pension will rise the least.