It appears that a year-and-a-half-long trend of increasingly rapid rising wages has come to an end, reports the employers’ association AWVN. According to the leading advisor on working conditions for Dutch companies, agreed wage increases in new collective agreements in August were slightly higher than in July, but still significantly lower than in previous months.
A total of seven new collective agreements were concluded in August, with wages increasing by an average of 7.4 percent. This is still historically very high and also 0.1 percentage points higher than in July. A few months ago, however, the average wage increase was 8.2 percent. At that time, wages were rising even faster than inflation.
AWVN warns that the August numbers should be interpreted with caution. August is a very quiet month every year in terms of new wage agreements, but this year there were even fewer new wage agreements than in other years. Given the recent decline in inflation and worsening economic sentiment, it seems obvious that wage settlements have peaked, according to the employers’ association. Also, the average wage settlement in 2023 is now 7.4 percent. Overall, almost 300 new wage agreements have already been signed this year.
The AWVN figures are being closely monitored by De Nederlandsche Bank (DNB). At the beginning of this year, DNB President Klaas Knot was still concerned about the high wage increases agreed upon by unions and employers in various industries. Sometimes wages rose by 10 percent or more. Such wage increases would make it more difficult to stop the hefty price increases of late.