Due to higher earnings, relatively less money went to wages in 2021

Due to higher earnings, relatively less money went to wages in 2021


NOS . News

Of every euro earned last year, 74.9 cents went to wages for employees and the self-employed. This is lower than the previous year. In the first Corona year 2020, 77 cents from every euro earned went to employees and self-employees.

This is evidenced by figures from Statistics Netherlands (CBS) on the so-called labor income ratio in the market sector. This is the overall economy without government, education, and health care, among other things.

The labor income ratio says something about who receives the economy’s profits. In 2021, the employment income rate again remained below the long-term average from 1995 to 2021.

Earnings up

The fact that relatively less money went to employees and freelancers was due to increased profits, CBS reports. In 2021, the economy recovered after the first hit of Corona, and corporate profits rose as a result. Statistics Netherlands reported that wages remained relatively stable, leaving more money for companies. The average labor income has decreased.

In 2020, it was still in the opposite direction: profits fell sharply due to the Corona hit, but wages remained more or less the same. As a result, the proportion of labor income rose that year.

raise wages

The share of money going to employees and the self-employed has fallen last year in the catering industry, but it’s also gone down in the transportation and warehousing industry.

In the cultural, sports and entertainment sector, a greater part of the money went to income. That’s because earnings in those segments were still negative in 2021, CBS reports.

The Central Planning Bureau concluded last week That there is room for a wage increase. Then the researchers pointed to a decrease in the proportion of labor income and an increase in profits. For researchers, this means that wages can be increased once. They argue that this would ensure a fairer distribution of the burden of inflation between firms and households.

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