Klaas Knot warns of a wage-price spiral. Years ago he called on employers to raise salaries, but little response was given. Let’s just wait for them to cut wages.
While employees at sheltered employment in Groningen are campaigning for 10 percent more wages, the director of De Nederlandsche Bank, Klaas Knot, warns that a higher salary increase than 7 percent is not wise. His message is a hard sell in this day and age.
It was before the corona time that Prime Minister Rutte and Knot called on employers to raise wages. The profits of the companies were already rising sharply at that time, but the salaries lagged behind. The calls were met with little response.
During the corona period, many companies received subsidies from the government and profits remained stable. Due to the war in Ukraine and the aftermath of the corona pandemic, inflation started to rise sharply last year and considerable wage increases soon followed.
So there was quite a few years between the first calls from Knot and Rutte. And then the wage increases should stop already, now that they have just started? That will be difficult for many employees to swallow.
Last year, groceries and fixed costs quickly became more expensive for many Dutch people. Many companies have raised their prices beyond what was strictly necessary before inflation. It is called graaiflation.
Many citizens saw their income rise much less. It is not for nothing that the cabinet felt compelled to introduce energy surcharges. We live in one of the richest countries in the world, Rutte regularly says. Yet part of the population does not notice it enough. That is an important source of the brewing discontent.
From his responsibility as director of De Nederlandsche Bank, Knot must of course warn against a wage-price spiral. But from the point of view of many employees, it makes sense to get a decent salary increase first.