Collective wage increases lower than inflation

Collectively negotiated wages in the Netherlands did not rise as strongly last year as in 2020. Employees did not benefit much, especially at companies hit hard by the coronavirus crisis. In addition, the increase in wages is dwarfed by the price increases consumers have been dealing with recently, much to the dismay of trade union FNV, among others.

According to preliminary figures from Statistics Netherlands (CBS), wages rose by 2.1 percent last year. In 2020, that was 2.9 percent. The most substantial wage increase in 12 years was mainly because most collective bargaining agreements on wage increases were made before the coronavirus outbreak when the economy was doing very well.

The picture for 2021 shows that wage developments are lagging behind inflation. According to the most recent data, daily life was 5.2 percent more expensive in November than a year earlier. The prices that Netherlands residents pay for goods and services have not risen so sharply since September 1982.

According to trade union FNV, employees are tired of having to renegotiate the inflation adjustment and the preservation of their purchasing power every year. Petra Bolster of FNV's daily board points out that employees' situation is deteriorating. "To prevent this, we demand that wages automatically increase in line with prices. This must be laid down in the collective labor agreements," she said. She referred to intentions announced in September for the collective labor agreement negotiations, in which the union already put this requirement on the table.

Employees covered by a collective bargaining agreement benefited the least in the catering industry last year. In that sector, collectively negotiated wages rose on average by only 0.3 percent since the tables were adjusted for the development of the statutory minimum wage. The catering collective bargaining agreement was extended by one year in 2021 under the same conditions. Therefore, most employees in the catering industry received nothing additional at all.