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NOS News•today, 07:05•Changed today, 07:14
With a narrow majority, the House of Representatives voted yesterday during the General Political Considerations for an additional increase in the minimum wage of 1.7 percent. What does this mean in concrete terms?
What do you earn with the minimum wage?
The minimum wage is now 12.79 euros per hour. With the increase, this will increase to 13.50 euros.
The reality is slightly more complicated, because the minimum wage is linked to your age and the number of hours you work. For example, the hourly wage for a 19-year-old who works 36 hours a week is different from that of a person over 21 with a 40-hour contract. From the age of 21, the hourly wage no longer increases with age.
In this table of the central government, these differences can be seen. Please note that the amounts have not yet been adjusted to yesterday’s decision.
Who earns the minimum wage?
The most recent figures from the Central Bureau of Statistics are about 2021. At that time there were 439,000 jobs in which a maximum of the minimum wage was earned. More than half of these were jobs for young people.
Temporary workers and people with a migration background in different sectors also more often earn a minimum wage, previous evidence shows research of the Central Planning Bureau (CPB).
Business response: ‘Destroy the engine of the economy’
Ingrid Thijssen, chairman of the employers’ association VNO-NCW, does not like the extra increase of 1.7 percent (on top of the increase of 10 percent at the beginning of this year). “Entrepreneurs and employers in the Netherlands are very concerned about this. We are destroying the engine of our economy. When we look back on this in five or ten years, we will think: ‘What have we done?'”
SMEs will suffer from this, says Thijssen, but according to her we should not think that large companies can easily bear the increase. “The fact that a few large companies happened to have made a little more profit last year should not be abused as an argument for very unwise measures. That will make us all worse off in the longer term.”
She advocates lowering taxes on labor: “Work should pay more.”
In which sectors do you earn the minimum wage?
There are two ways to look at this. The share of employees earning the minimum wage is the highest in relatively small sectors such as transport and postal services.
Larger professional groups, where the share is lower, but in absolute terms many more people work with a minimum wage, are the catering industry and shops.
Another sector where more than average people work for a minimum wage is the temporary employment sector.
What is the effect of the increase?
Of course, people who earn the minimum wage will improve, but the increase also affects other income groups. The minimum wage is linked to the state pension and social assistance. They rise with it.
In addition, the same CPB report showed that wages just above the minimum wage are also increasing: in practice, they are also increasing. And that is quite a large group: according to the CPB, approximately 20 percent of employees have a wage that does not exceed 125 percent of the minimum.
Response from the Social Minimum Committee: ‘Everyone falls short at the bottom’
“It is a step in the right direction,” says Koen Caminada, professor of social and tax regulations and member of the Social Minimum Committee. This summer, the committee produced a report in which, at the request of outgoing Minister Schouten, it was calculated what people need to live on.
One of the most important conclusions was that people cannot make ends meet on social assistance. “Everyone comes up short at the bottom.” If social assistance increases, the same must happen with the minimum wage. Otherwise, the difference between social assistance and the minimum wage will be too small and the incentive to work will be less strong.
The committee’s proposal was therefore to increase both social assistance and the minimum wage by about seven percent.
Committee member Caminada understands the problems of SMEs, but thinks that employers also do not like it when their employees cannot make ends meet. “If wages are so low that people can no longer pay their fixed costs, the wage is simply too low.”
2023-09-23 05:05:06
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