Collective wage increase equals record from 2023; Highest increases in over 40 years

The wages in collective bargaining agreements increased by 6.8 percent in the third quarter compared to the same quarter last year. That is equal to the record increase in the last quarter of 2023 when collective bargaining wages saw the biggest rise in over 40 years, Statistics Netherlands (CBS) reported.

Of the three sectors, private sector wages rose the most, with an increase of 7.3 percent. The subsidized sector, which mainly consists of collective bargaining agreements in healthcare, saw a 7.1 percent increase, and wages in the government rose 5.4 percent. In the third quarter of last year, government wages increased the most and those at subsidized institutions the least.

Housing corporations saw the biggest increase in collective bargaining wages last quarter at 12.4 percent. Workers in the hospitality industry also got a big bump at 10.8 percent.

Education wages increased the least (+2.1 percent) last quarter. But in the third quarter of last year, collective wages in the sector rose by 9.3 percent. “This is mainly because wages in the two largest education collective labor agreements (primary and secondary education) last increased in the third quarter of 2023,” CBS said.

The real wage development, in which the collective wage increase is corrected for inflation, amounted to 3.1 percent in the third quarter. “This increase is less than in the past three quarters, but still higher than a year ago when the wage development decreased by 1.4 percent,” CBS said.

Trade unions have been demanding high wage increases to compensate for recent high inflation. While inflation has dropped to 3.5 percent in September, FNV is still demanding increases of 7 percent in ongoing negotiations, while CNV is demanding between 3.5 and 6 percent. Company profits have increased much more than wages in recent years, and FNV argues that workers should benefit from that.

Klaas Knot, president of De Nederlandsche Bank, has been warning for some time that high wage increases will lead to more spending, which will push inflation higher - the wage-price spiral. “If wages do indeed increase by 7 percent, that will add a full percentage point to inflation in 2026. That means that your and my shopping basket will continue to rise in price for even longer. The parties at the collective labor agreement table must take that into account,” he said last month.