Why we can do less with our monthly salary | NOW

With the amount we earn every month, we can do less and less. How much is our salary really worth today? And why is it that our country is richer than ever, while many people now have to get by?

According to Statistics Netherlands, the disposable income per population more than doubled during the last fifty years. Yet many people currently feel they have to work harder for less.

This is primarily due to the increased workload, says FNV chairman Tuur Elzinga. “Labor productivity has also increased. Profits have risen to record highs, as has shareholder compensation. But many workers’ incomes have stagnated for years. We call this skewed growth. There is plenty of money, but it is distributed more and more unequally.”

In addition, due to extreme inflation, we can also buy less with our income. In July, consumer goods and services were 10.3 percent more expensive than in the same month a year ago.

According to Hugo Erken, economist at Rabobank’s RaboResearch, inflation for lower incomes is even higher. “For this group, inflation is more likely to be around 15 percent or even higher. This is because the cost of energy and food for low-income people makes up a relatively large part of their total expenditure. In these categories, we have seen the largest price increases.” With the inflation calculator from Statistics Netherlands, you can calculate your personal inflation figure.

Living has become much more expensive

There is a shortage of affordable housing. Because of the high house and rent prices, workers are getting fewer and fewer homes for their wages. In addition, tenants often have poorly insulated homes, which in turn results in higher energy bills. “Like Woonbonden, we believe that the rents must be lowered as soon as possible and not until 2024, as the government proposes. It is an immediate incentive to quickly become more sustainable. Because if that doesn’t happen, you will be a little higher. income disappears immediately, says Elzinga.

This brings us directly to the skyrocketing increase in gas prices, which makes the cost of living even higher. Therefore, the government already came up with a compensation for the high gas bill. People on low incomes can get a one-off energy subsidy of 1,300 euros extra. Erken: “This compensation helps, but we don’t expect energy prices to fall in the near future, so energy is expected to remain expensive.”

Is higher pay the solution?

FNV wants people to be able to continue to buy the same thing from their salary in any case. “In addition, we want to see some improvement in purchasing power with a fixed amount of 100 euros. It is proportionally more for lower incomes,” says Elzinga. Erken: “Of course you compensate the wage earners for inflation, but the higher wages in turn lead to higher labor costs for the employers, who then raise their prices. This makes you more expensive compared to foreign competitors.”

“Enough companies are still licking the wounds of the corona crisis or have tight margins because product prices have risen sharply.”

Hugo Erken, economist at RaboResearch

What is a step towards repair is raising the minimum wage, says Erken. FNV also wants employers to pay staff at least 14 euros gross per hour. But raising the salary is not without consequences, says Erken. “Not all employers can pay their staff more. Enough companies are still licking the wounds of the corona crisis or have tight margins because product prices have risen sharply.”

An often-heard solution: Tax people with wealth more heavily so that work can actually be taxed less heavily. Elzinga: “Many earn money with money and pay less tax than people who earn their money with hard work. We want a higher profit tax for companies and a higher tax on wealth. Income from wealth must be taxed at least at the same level as income from occupation.”

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