The Netherlands is experiencing the largest strike wave in ten years. This week alone, seven different professional groups are on strike. The various sectors are striking for a better collective labor agreement. But simply approving the wage demands is not the solution to the problem, thinks Rabobank chief economist Ester Barendregt. ‘The question is how much is possible per sector and per company.’
‘Higher wages are necessary and there is room for them, so I expect them to rise’, adds Barendregt. But according to the chief economist, there is a difference per sector and per company in what is possible. That is why it is important to negotiate at that level. Despite the differences between the sectors, there is a similarity between the demands of the strikers. ‘There is a lot of emphasis on the money, more than on the schedules and work pressure, for example.’
Barendregt thinks it is logical that the emphasis is on wages: ‘It is currently a real issue due to the high inflation. Employees are faced with increased costs for energy bills and groceries. The government is doing something about this with the price cap for energy, but that cannot last forever. So something has to change in the labor market.’
Chairman Raymond Puts of employers’ association AWVN also sees that there are many strikes. ‘But we have to put it in perspective because we conclude more than three hundred collective labor agreements a year’, Puts puts things into perspective. The chairman of AWVN agrees with Barendregt that wages can go up a bit. ‘But part of the solution lies in looking at where the pain is greatest.’
There are also companies and sectors that have recently made a lot of money. For example, the retail sector and the oil sector. But according to Puts, a large part of this was earned abroad and not so much in the Netherlands. ‘Not all companies are able to pass through all costs and thus raise wages.’
That is what the trade union FNV would like to see, they demand automatic price compensation. This doesn’t seem like such a good idea to Barendregt. ‘Then you automatically link wages to prices and then there is a chance that you will end up in a wage-price spiral, just like in the 1970s,’ explains the chief economist.
In addition, according to Barendregt, it is important that sectors can continue to make their own agreements: ‘Wages play a role in properly matching supply and demand. Especially now, in times of a tight labor market, it is important that employees are deployed efficiently. Wage formation is an instrument for that.’
Meanwhile, the strikes continue and in many cases employers and unions still do not agree. Puts sees that the temperature of the talks is rising. ‘Due to the corona crisis, we come from an unpredictable world in which we have gone from one crisis to another. This makes it challenging for employers to follow patterns and makes it more difficult to have conversations,’ says the chairman of AWVN.
Both Puts and Barendregt do agree that employees and employers should continue to talk to each other. “Otherwise we’ll get further apart.”