Business organizations also warn of a wage-price spiral

- Advertisement -spot_imgspot_img

VNO-NCW and MKB-Nederland also warn of the dangers of a so-called wage-price spiral as a result of the high wage demands of trade unions during collective bargaining. Higher wages lead to higher prices, which in turn lead to higher wage demands.

‘Nobody benefits from that, it is worrying’, according to the employers’ organisations. This weekend, Klaas Knot, president of De Nederlandsche Bank (DNB), already warned of an impending wage-price spiral. In order to combat inflation in such a situation, he believes interest rates must be raised to such an extent that the economy can end up in a recession.

Balance

Where wages can go up, they should. However, it requires a careful balance. After all, ever higher wage increases also lead to higher prices. Companies must pass on cost increases in order to continue to invest in the future,’ says VNO-NCW.

Where wages can go up, they should. However, it requires a careful balance’

VNO-NCW

The entrepreneurs point out that collective labor agreement wage increases are already around 7.5 percent. “And on top of that, many one-time/additional rewards are provided.”

Grab inflation

A recent Rabobank study on ‘grabbing inflation’ shows that companies have increased their selling prices more than would be the minimum necessary to maintain their profit margin. “In the public debate, the suggestion is made that entrepreneurs would take advantage of the situation by raising prices more than necessary,” said the entrepreneurs. However, according to them, that is not true.

According to VNO-NCW, employers also have a role to curb inflation, just like the trade unions, by not raising prices unnecessarily. The entrepreneurs also point out that higher profits are not necessarily the result of higher margins. ‘For example, we see profits increasing at some large companies, but margins are declining. Companies in various sectors are also processing the consequences of the corona period and extra profit is sometimes made through the one-off sale of subsidiaries.’

VNO-NCW and MKB-Nederland warn of a wage-price spiral as a result of the high wage demands of trade unions.
VNO-NCW and MKB-Nederland warn of a wage-price spiral as a result of the high wage demands of trade unions. (ANP / Jean-Pierre Jans)

- Advertisement -spot_imgspot_img
Latest news
- Advertisement -spot_img
Related news
- Advertisement -spot_img