A Great Wage Agreement is needed between employers and employees. With this agreement, Frans Timmermans aims to provide a salary increase for 8 million Dutch workers and lay the foundation for a strong and social economic future. A future government must conclude this agreement, with arrangements for salary increases and investments to improve the Dutch economy. Timmermans will elaborate on his plan tonight, on Labor Day, during the Spiekman Lecture in Rotterdam.
With a Great Wage Agreement, the Netherlands can set a course towards the economy of the future. Over the past thirty years, the share of salaries in every earned euro has dropped from 80 to 68 cents. This development is not good for the economy and is not fair, argues Timmermans. This decline has led to low productivity growth, stagnating incomes, a wage backlog for employees, and a growing gap between wages and profits.
Therefore, GroenLinks-PvdA presents the Great Wage Agreement for the Netherlands: a plan where salary increases go hand in hand with investments in the economy, so that growth is distributed more fairly and work pays off again.
New Welfare State
“To guarantee everyone a decent existence, a new welfare state must be built,” says Timmermans. An important component of this new welfare state is higher salaries. More and more people cannot make ends meet on their wages, let alone build a decent life. One in five households struggles to make ends meet, and more than 200,000 people in the Netherlands live in poverty.
This cabinet reversed a promised wage increase, wants to shorten the duration of unemployment benefits, and cuts billions from healthcare, education, and social security. It is time for a Great Wage Agreement.
The Great Wage Agreement ensures higher wages for workers. The goal is to reduce the gap between wages and profits and to increase the labor income share (AIS) back to 80 percent in the long term.
The government can support these wage increases by further raising the minimum wage, improving working conditions in the public sector, and setting clear social requirements through tenders. Companies should only be eligible for contracts if they pay their employees at least 16 euros per hour.
Future Fund
To make this wage increase possible for entrepreneurs, it is essential that the government invests in the economy of the future. “Because companies should expect something in return for their contribution to the common good,” says Timmermans. “I therefore propose an ambitious Future Fund: 25 billion euros that we can spend over the next four years on modern railways, scientific research and innovation, and the sustainability of our industry.
Fair Salary in Everyones Interest
The entire society benefits from fair salaries. If the middle class can live without worries on a decent salary, it creates peace and trust. And when wages rise, people have more to spend, contributing to the economy. Employers benefit from well-educated, motivated employees who take pride in their work and look to the future with confidence.
Entrepreneurs are also less likely to invest in new machines and applications of new technologies if they benefit from low wages. Entrepreneurs who do want to invest often cannot compete with competitors who rely on cheap labor. GroenLinks-PvdA wants the Dutch economy of tomorrow to compete on quality, not on price.
The Great Wage Agreement is not a short-term solution, but an investment in the future of the Netherlands.
However, this agreement can only be successful if there is a government that puts the interests of working people at the center. It is time for a fundamental shift, where fair wages, good working conditions, and a strong economy go hand in hand. GroenLinks-PvdA is ready to realize this shift and build a Netherlands where everyone can lead a decent life.