Collective wage increases slowing down; Still "historically high" at 5.2%

In the first seven months of 2024, the wages in collective bargaining agreements increased by an average of 5.2 percent, according to employers’ organization AWVN. That is significantly lower than last year’s 7.1 percent but still “historically high,” an AWVN spokesperson told NU.nl.

In July, collective labor agreement wages increased by an average of 5 percent. Trade unions and employers concluded 25 collective agreements covering around 80,000 employees. Wages increased most in construction, hospitality, culture and sports, and education.

Wage increases have been leveling off since the beginning of this year, the AWVN spokesperson said. “It seems that the decline is stagnating,” he added. “But at 5 percent, we are still at a historically high.”

Before the coronavirus pandemic, wages increased by 2.5 percent on average, which was high at the time. Early in 2022, Russia invaded Ukraine, triggering an energy crisis and massive inflation (11.6 percent in 2022 and 4.6 percent in 2023). Unions started asking for high wage increases to protect workers’ purchasing power.

Inflation is still high, and the Dutch labor market is very tight, so the wage increases remain significant. “Companies are doing everything they can to retain people. That includes good employment conditions,” the AWVN spokesperson said.

Employers can’t keep this up for much longer, the AWVN said. Their margins are quickly shrinking. It is also a worrying situation for the Netherlands as a whole. “Wage costs are increasing, and that has consequences for the business climate. It also affects the competitive position.”