In The Hague, left-wing parties have been voting for a significant increase in the minimum wage for some time. Independent MP Pieter Omtzigt and Volt party leader Laurens Dassen even make a plea on this site to raise the minimum wage by a total of 5.5 percent on January 1, and not to wait for the outcome of the formation.
The minimum hourly wage will rise on 1 January by 14 cents per hour (or almost 1.5 percent), to 9.96 euros. According to Omtzigt and Dassen, however, to keep purchasing power approximately the same, the minimum wage must be increased by an extra 4 percent. That is about 70 euros per month. Their proposal will be voted on tomorrow.
Nora Neuteboom, senior economist at ABN Amro, confirms that an increase in the minimum wage ‘may be highly desirable from a socio-economic point of view’, especially for lower incomes. “Especially if politicians have the goal of rectifying inequality, because many people with flexible contracts or low wages have been extra affected by the corona crisis.”
Bert Colijn, senior economist at ING, thinks that an increase in minimum wages can make ‘a modest contribution’ and that this is just one of the buttons you can turn to boost people’s purchasing power in times of high inflation. . In addition: Colijn calls the current inflation level ‘to a large extent temporary’. “Yet there is also a lot of shortage on the labor market and corporate profits give room to raise wages extra.”
Neuteboom warns that a huge increase in (minimum) wages could lead to additional inflation. She also expects that the current high inflation will not last and thinks that a one-off step, if modest, will not trigger a so-called wage price spiral. “You can never be 100% sure.” She also emphasizes that ‘numerous other measures’ are conceivable (such as tax interventions) to accommodate low incomes. “But they are less visible and therefore less popular in The Hague.”
Watch all our videos about the economy here:
#Experts #Minimum #wage #increase #desirable #inflation #specter #looming