The first seven months of 2024 have seen wages in the Netherlands increase by an average of 5,2 percent. This is lower than last year’s increase but is still higher than inflation.

Growth of salaries in the Netherlands levelling off

In 2023, wages controlled by collective bargaining agreements saw an average rise of 7,1 percent. These relatively high increases were issued to offset record high inflation experienced in 2022. At the end of last year, as inflation started to fall again, several Dutch employers planned to give smaller wage increases for 2024. 

In July of this year, wages rose by an average of 5 percent. Salary increases have therefore been decreasing and appear to be stabilising. “But at 5 percent, we are still at a historic high," said a spokesperson from Dutch employers’ association AWVN.

According to preliminary data from AWVN, 25 collective labour agreements covering 80.000 employees were finalised in the first seven months of 2024. The effects of high inflation and a skilled worker shortage are still resulting in sharp salary hikes. "Companies are doing everything they can to retain people,” a spokesperson told NU.nl. “That includes good employment conditions." Wages increased the most in certain high-demand job sectors such as construction, hospitality, culture and sports, and education.

Rises in wages higher than inflation on average

Inflation stood at 3,7 percent in July of 2024, mainly due to the higher costs of rental housing and food. Even though wage increases have been getting smaller, they have still stayed above the rate of inflation. 

While this is a positive for anyone working in the Netherlands, AWVN sees it as a worrying situation. "The wage costs are increasing and that has consequences for the business climate. Moreover, it affects the competitive position," a spokesperson said. Economists also believe that businesses won’t be able to continue increasing wages like this, as labour costs are also increasing.

Thumb image credit: Frans Blok / Shutterstock.com