Biggest rise in collective wages this century; Vacancies on the rise again

Last quarter, the wages in Dutch collective labor agreements increased by the most since at least the beginning of this century, Statistics Netherlands (CBS) reported. Even when adjusted for inflation, this is a “historically high” wage increase, said CBS economist Frank Notten. After months of decline, the number of vacancies in the Netherlands has increased slightly again, Indeed reported.

Employees covered by a collective bargaining agreement saw their hourly wages increase by 6.1 percent compared to the third quarter of last year. The statistics office has not seen such a strong increase since it started recording quarterly figures on collective labor agreements at the start of this century. Notten said that in the early 1980s, there was sometimes a larger collective labor agreement wage increase at an annual level, but according to him, that figure cannot be properly compared with the current quarterly figures.

Companies increased wages for their staff so much due to inflation. Employers were forced to meet the trade unions’ demands, Notten said. According to him, there has been “considerable inflation repair.” Collectively agreed wages rose especially sharply in education, by 8 percent. And the figure doesn’t even include the recent collective agreement for secondary education.

Inflation has decreased considerably in recent months because energy prices are significantly lower than a year ago. CBS will announce the inflation figure for the third quarter next week. But based on the monthly figures for July and August and the initial estimate for September, the inflation rate will be around 2.6 percent, the statistics office thinks.

That is considerably lower than the wage increase. The real wage increase would then be 3.4 percent. Notten explained that this figure was a good indicator of Dutch employees’ purchasing power. So, given their collectively agreed wages, employees have made the most progress in their wallets since CBS started keeping track of this figure at the beginning of this century.

CBS reported last month that the Netherlands experienced the largest decline in purchasing power in about 40 years in 2022. But that included much more data, not only on employees but also on self-employed people, for example. It also included government measures to help households with their energy bills, “The fact that real wage increases are now so high does not mean that purchasing power as a whole will also increase so sharply,” Notten explained.

Vacancies rising again

The number of vacancies in the Netherlands increased slightly after months of decline, according to Indeed’s analysis of millions of vacancies. Indeed says it is the largest job site in the Netherlands. The number of vacancies reached the lowest level since October 2021 in July, but the upward trend started again in August and September.

At the end of last year, vacancies were still at a record high. “Since then, the vacancies have decreased considerably, but nevertheless, the level is still well above the level at the beginning of 2020,” said Stan Snijders of Indeed Benelux. That is different in neighboring countries like Belgium and the United Kingdom, where there are fewer vacancies compared to before the coronavirus crisis.

In the Netherlands, the level of vacancies in education has remained high, according to Indeed. The number of vacancies also increased further last month. According to Snijders, teachers have been able to choose between jobs for some time. “That is a big problem for many schools, which are forced to make adjustments, such as increasing class sizes and shortening schedules,” said Snijders.

Indeed observed a significant decline within the software development sector. According to Snijders, that sector has experienced relatively little disruption from the coronavirus pandemic. In addition, job seekers outside the Netherlands and Europe also respond to available jobs. “10.6 percent of the ‘clicks’ on these vacancies came from job seekers outside the EU,” Snijders explained.