‘Historically high’ increase in collective labor agreement wages this year

Collectively agreed wages have never risen as much as in the past year in decades. Employers and employees agreed on an average wage increase of 7.1 percent in 2023. High inflation and the shortage of personnel are the basis for this.

The increase is “historically high”, says the General Employers Association of the Netherlands (AWVN). On Thursday, the AWVN published an inventory of all collective labor agreements concluded this year. This concerns 439 collective agreements, for 3.7 million people.

Employees in the paper industry received the highest wage increase: 8.09 percent over twelve months. Wages also rose by almost 8 percent in the food industry and chemicals.

The AWVN notes, among other things, that in a third of the collective labor agreements concluded this year, different categories of employees receive different pay increases. The lowest paid earn relatively the most in these collective labor agreements.

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The employers’ association is concerned about the strong increases. She fears that the emphasis that the unions place on higher wages puts pressure on the investments that companies have to make for the longer term. “It is also about investing in employees. If the growth of labor productivity receives too little attention, this will ultimately be at the expense of the strength of the economy,” says the AWVN.

Now that society is aging, employers and employees must think more about how more work can be done with fewer people, says the employers’ association. She would also like to see more attention paid to the high absenteeism due to illness in some sectors.

At the beginning of December, employers’ organization AWVN, VNO-NCW and MKB Nederland warned that the strong wage increases would be economically “unsustainable”. That increase would be independent of the economic situation at many companies. “CLA parties must again link wage growth to the business economic situation and the prospects in the sector,” the three said.

The average wage increase of 7.1 percent is the highest since the 1980s. In 1982, the organizations of employees and employers in the Netherlands concluded the so-called Wassenaar Agreement. That put an end to the strong wage increases and tough negotiations between companies and unions. Employees and employers then agreed on wage moderation in exchange for a reduction in working hours.

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