May 20, 2022

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Highest inflation since 1976 and wage growth lagging far behind |  Financial issues

Highest inflation since 1976 and wage growth lagging far behind | Financial issues

Already high prices have risen due to the war between Ukraine and Russia. For example, prices for electricity, gas and district heating have risen sharply, but food has also become more expensive.

The evolution of collectively negotiated wages, which is rising 2.4 percent faster than last year, is still far behind. Collectively negotiated wages cannot directly follow sudden price increases because wage developments are partly the result of previously made collective agreements. The provisional figure from Statistics Netherlands for the first quarter of 2022 is based on 74 percent of collective labor agreements.

Government

Sector-wide, the lowest wages rose in government, at 0.8 percent. This is related to wage agreements reached earlier. In the first quarter of 2021, the government sector was still one of the sectors with the highest wage growth (2.7%). In the subsidized enterprise sector and the private corporate sector, wages rose by 3.3% and 2.6%, respectively.

Wages rose 3.8 percent in the transportation and warehousing sector, and at least 0.3 percent in the hospitality, education and energy supply industries. The construction industry, like the health and wellness sector, showed a 3.4 percent growth in the last quarter.

There are no known developments in the real estate rental and trading sector, because no collective labor agreement has been reached for the majority of workers in this sector.

12% inflation

Last week, the Statistics Office announced that inflation in the Netherlands had risen to nearly 12 percent.

However, the harmonized European method was used, which was created to allow a good comparison of inflation data from different European countries. Statistics Netherlands now provides the monthly figure according to its own method of calculation.

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