Life in the Netherlands is getting more expensive. While wages are slightly increasing, they cannot keep up with the rising high inflation.
From expensive groceries to high energy bills, many residents are losing purchasing power. In August, inflation reached a record high of 12% in the Netherlands.
The main cause for this increase can find its root in the higher energy bills, and Russia’s chokehold on the gas supply in the EU.
As a result, other things, such as food and clothing, have become more expensive nowadays.
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Rising wages can’t keep up with the pace
Last month, the average increase in wages was about 4%, according to AWVN, the largest employer’s association in the Netherland.
The good news is that wages will also be on the increase in the coming months, as per NU.nl.
The bad news is that the increase will most likely not be high enough to correct the effect of inflation on the economy. “These companies cannot afford that.” says an AWVN spokesperson.
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“There is no question of a wage wave. […] There are many companies, especially SMEs, that cannot correct inflation through a significant wage increase. These companies cannot afford that.”
With high inflation comes high demand
Surprisingly, it may be a good thing for inflation to remain high. Let’s not forget that the Netherlands is also dealing with a huge staff shortage.
If the inflation rate remains the same, wages in many sectors will increase much faster in order to attract workers to low-staffed positions.
“The vast majority of companies make significant profits, and it is time for employees to take advantage of this. They are supplying purchasing power now that groceries and energy are becoming more expensive. It is time for considerable compensation,” says a spokesperson to NU.nl.
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