Dutch households experienced a slight increase in their disposable income in the first quarter of this year, according to the latest data from the statistics office CBS. The average household had 1.7 percent more to spend compared to the previous year, thanks to rising wages and increased working hours.
Despite the ongoing inflation, households had slightly more money left over at the end of the month. Real disposable income, which takes into account price increases, rose by 1.7 percent. This increase was primarily driven by the Dutch working more, with the number of hours worked increasing by 2.2 percent in the first quarter.
Both employees and the self-employed saw a higher salary for their increased working hours. Employees experienced an average wage increase of 7.7 percent, while collective labor agreement wages rose by 5.4 percent. Benefits also increased by 11 percent, as they are often linked to the minimum wage, which saw a 10 percent rise on January 1, 2023.
However, households also faced some financial challenges during this period. They paid an average of 4.4 percent more in taxes and social security contributions, and mortgage debt also increased.
Looking ahead, the Central Planning Bureau (CPB) predicts a significant increase in poverty in 2024. The expiration of certain measures, such as the energy allowance provided by municipalities, is expected to result in 995,000 Dutch people, including many children, living below the poverty line next year.
The end of the energy supplement and other measures will contribute to this rise in poverty, highlighting the need for further support and assistance for vulnerable households in the coming years.
How did rising wages and increased working hours contribute to the uptick in disposable income for Dutch households during the first quarter of this year?
Dutch households saw a promising uptick in their disposable income during the first quarter of this year, with a 1.7 percent increase compared to the previous year, according to the latest data from the statistics office CBS. This boost can be attributed to rising wages and increased working hours.
Despite the ongoing inflation, households found themselves with more money left over at the end of each month. The real disposable income, which takes into account price increases, also rose by 1.7 percent. A significant driver of this increase was the fact that the Dutch were working more, with the number of hours worked rising by 2.2 percent in the first quarter.
Both employees and the self-employed benefitted from higher salaries due to increased working hours. Employees experienced an average wage increase of 7.7 percent, while collective labor agreement wages rose by 5.4 percent. In addition, benefits increased by 11 percent, as they are often linked to the minimum wage, which saw a 10 percent rise on January 1, 2023.
However, households did face some financial challenges during this period. They had to contend with an average 4.4 percent increase in taxes and social security contributions, and mortgage debt also grew.
Looking to the future, the Central Planning Bureau (CPB) has predicted a significant increase in poverty for 2024. The expiration of certain measures, such as the energy allowance provided by municipalities, is expected to push 995,000 Dutch people, including many children, below the poverty line next year.
The discontinuation of the energy supplement and other measures will contribute to this rise in poverty, highlighting the urgent need for further support and assistance for vulnerable households in the coming years.
It is certainly a positive development to see Dutch households experiencing an increase in disposable income. However, the concerning forecast of rising poverty by 2024 calls for immediate attention and action from policymakers to address the root causes and ensure the prosperity is felt by all segments of society.
This article sheds light on the paradoxical situation in the Netherlands, where household disposable income is currently on the rise but unfortunately, poverty is projected to escalate by 2024. A clear indication that governments must pay equal attention to ensure sustainable economic growth benefits all segments of society, preventing the widening gap between the rich and the poor.