Collective wages in the Netherlands increased by an average of 1,2 per cent at the start of 2015, according to a study undertaken by the Dutch Central Bureau of Statistics (CBS).

Wage increases by sector

Of all sectors, the industrial branch enjoyed the strongest rise in negotiated wages (1,9 per cent) in the first quarter of 2015, due mainly to wage agreements which came into force during the previous year.

Notable wage increases were also seen in water and waste management (1,8 per cent), storage and transportation (1,5 per cent) and education (1,5 per cent).

On average, Dutch employees have seen an annual collective wage increase of between 0,9 per cent and 1,5 per cent since 2011.

Wages rising ahead of inflation

Taking into account that inflation was at 0 per cent in January and February of 2015, the real wage increase for this period sits at 1,2 per cent above inflation.

Employers hardly feel the difference

The CBS study shows that contractual labour costs in the Netherlands - the contributions employers must pay to cover workers’ sick leave, pension and other social funds - rose by only 0,4 per cent in the first quarter of 2015.

This minimal rise in labour costs meant Dutch employers hardly felt the salary increase, and marks the lowest labour cost increase in 15 years.

Lower premiums for pensions, disability

In 2006, collective wage increases also came out ahead of growth in labour costs to employers - the only other time this phenomenon has occurred in recent Dutch history.

Back then, analysts explained the difference as a result of employers needing to pay less on certain premiums, such as disability and early retirement. According to CBS, this is once again the case.

The difference between negotiated wage increase and actual wage costs is most striking in the governmental sector, where the wage increase over the past year (1,4 per cent) was negated by a reduction in pension, meaning actual labour costs have remained unchanged since the first quarter of last year.