Strongest pay rise in 40 years, catering staff in particular make big gains

The rise in Dutch collective bargaining wages last quarter matched the strongest increase in more than 40 years. According to the Central Bureau of Statistics (CBS), employees received on average 6.8 per cent more salary than in the third quarter of last year. Wages rose particularly strongly in the hospitality industry.

The last three months of last year also saw wage growth of that magnitude. Earlier, CBS even counted on a plus just a little stronger for that period, but that figure was later revised downwards.

Sharp pay rise due to earlier inflation rise

That wages continue to rise hard is partly due to the earlier sharp rise in inflation. Unions are seizing on that to force sharp wage increases, and they are succeeding.

Employees in the real estate rental and trade sector in particular have improved significantly, by more than 12 per cent. These are the housing corporations, explained CBS economist Frank Notten. Staff there had not previously received this much wage increase. So, according to Notten, this is a kind of catching up.

Wages in hospitality sector rose sharply

The hospitality sector was also among the biggest risers in the third quarter, with a plus of almost 11 per cent. This is mainly due to the screwed-up minimum wage, Notten argues.

Employers recently expressed concern that wages continue to rise hard. "Sharply rising wage costs could weaken the competitive position and health of Dutch companies," warned employers' association AWVN.

No wage-price spiral yet

Moreover, when last quarter's wage growth is adjusted for inflation, the average increase is only 3.1 per cent. According to Notten, the sharp rise in prices following the Russian invasion of Ukraine has also still not been fully compensated with higher wages. As of the first quarter of 2022, wages are still about 2 per cent behind inflation in that comparison.

Strong wage growth could potentially rekindle inflation, is also a concern that is regularly heard. However, Notten does not have the impression of such a wage-price spiral. "Then it would have to be really out of control," he says. "What we do see is that some services have risen in price after wages were raised sharply in that sector."