The Dutch Senate passed the introduction of an hourly, rather than monthly, minimum wage this week.
After a year of inflation rates that have reached over 17% in the Netherlands, some of its workers might be able to take a little breather.
The measure, proposed on the initiative of MPs Kathmann (PvdA) and Maatoug (GroenLinks), will benefit above all those workers who, with a 40-hour working week, were paid the same at the end of the month as those who worked 36 hours a week — both of which counted as full time employment, the criterium for the minimum wage.
If you do the math, this will mean a pay rise of up to 11% for some groups of workers, The Netherlands Trade Union Confederation FNV told EUobserver, although the exact raise will depend on the sector.
While FNV welcomes the step to introduce an hourly minimum wage, their demand goes further: they call for the hourly minimum wage to be set at 14 euros per hour.
The country already has one of the highest minimum wages among the 22 member states with similar schemes, and for parties like the right-wing Forum for Democracy, business comes first.
“Since this law is effective, it will cost at least 140 million euros for those companies,” said Johan Dessing, a member of the Senate for this party, who voted against the proposal.
For this politician, the modification of the minimum wage law has a negative effect on companies that have already suffered the consequences of the coronavirus and a weaker economy.
“We decided that the problems for those companies, who receive no compensation for this, are more important than the introduction of the hourly wage,” he told EUobserver.
For the Confederation of Netherlands Industry and Employers VNO, introducing this measure in 2024 “causes a too rapid increase in costs for some companies in one year”. VNO also pointed out to the low-profit margins created by high energy and raw material prices.
Yet, the Dutch minimum wage is below the demands
The Netherlands is one of the 22 EU member states with minimum wage laws that benefit the poorest workers. The remaining five determine the minimum wage through collective wage bargaining.
So far in 2023, all of these countries but Greece have raised the minimum wage. However, only five of these increases have offset inflation; in Latvia, Romania, Germany, Slovenia and Poland.
In the Netherlands, the increase was just over ten percentage points in January. An insufficient increase, according to the national union.
“Minimum wages will remain well below the level demanded by FNV, and below the criterium set by the EU for an adequate minimum wage,” Dutch workers’ representatives told this outlet.
In October last year, the EU adopted a binding directive to ensure that all member states have adequate minimum wages, which sets the level at 60 percent of the gross median wage. The Netherlands is slightly below this level.
Setting minimum wages is a matter for the member states, and it is therefore up to them to set specific appropriate minimum levels, which must comply with the agreed framework by 15 November 2024. Hence, some member states set minimum wages on an hourly basis, others on a monthly basis.
As not all member states have minimum wage laws, the directive also provides for collective bargaining coverage to reach 80% of workers.
“Prices for groceries, energy bills and housing are exploding. People are really struggling to make ends meet. We have no time to waste, work must pay again,” said the Dutch MEP Agnes Jongerius, from the Progressive Party (S&D).