Productivity in NL needs to rise to boost wages, says CPB

Wages in the Netherlands are only rising by modest amounts partly because workers are not productive enough, the government’s macro-economic think-tank CPB said on Friday.

If people work harder and companies invest more in information technology and training, there will be more financial room for big wage rises, the organisation says in new policy paper.

Production per worker has not risen much since the 1980s but has completely slowed down since the economic crisis earlier this century, the CPB says.

This, said director Laura van Geest, is an ‘important explanation’ of why wages are stagnating and why the unions claim and increasing part of the Dutch national income goes to the private sector.

Unions, economists and the central bank have all called for higher wages in recent months. Cross-sector wage rises averaged 1.5% last year, according to figures from national statistics office CBS.

The central bank blames the slowdown on the rise in self-employment and short-term flexible contracts. However, the CPB disagrees. ‘There is no evidence that flexibilisation has led to structurally lower wages,’ the organisation states.

Automation, globalisation, competition with robots and with cheaper Asian workers may have an impact on wage developments but it is not possible to fully assess, the report states.

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