Increase Dutch labour costs at lowest level in two decades

Increase Dutch labour costs at lowest level in two decades

Last year, the Dutch labour costs per year of employment increased by 1.4 percent, the smallest increase since 1989.

The average annual increase over the past decade was 3.3 percent, according to Statistics Netherlands. Labour costs are composed of wages and social contributions paid by employers. It is important for the Netherlands to keep labour costs down, if it wants to maintain its international competitive position.

With 55 percent, labour costs per year of employment have risen most in the sector financial services in the past decade. In banking, average labour costs rose by no less than 62 percent. Labour costs increased the least in the sectors hotels and restaurants (26 percent) and retail trade (29 percent).

Total labour costs amounted to 300 billion euro in 2010. On average, employers paid 51 thousand euro per year of employment, i.e. 40 thousand euro in gross wage plus 11 thousand euro in employers’ contributions. Over the past decade, gross wages per year of employment did not rise at the same rate as employers’ contributions. Gross wages increased by 34 percent, employers’ contributions by 57 percent. Pension contributions in particular rose substantially. As a result, the share of employers’ contributions in total labour costs has increased in the past decade by 2.6 percentage points to 22 percent.

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