Rabobank economist Michiel van der Veen talks about a mixed picture between sectors with remaining profits and the room companies have for further wage increases. ‘In the machine building industry, for example with a company like chip maker ASML, the profit margins are quite substantial. There is therefore room for considerably higher wages. There is also space in the trade sector,’ he told the ANP news agency.
Retail
But in retail, for example, that space is much smaller, says Van der Veen. In addition to high inflation, that sector is also struggling with the economic slowdown, which is driving people to spend more, impacting bottom line. Margins are also low in shipbuilding, as are consumer electronics makers as they grapple with higher prices for metals and components, the economist says.
ABN AMRO’s Albert Jan Swart says that for most sectors there is pressure on margins and therefore there is less room for further wage increases. Things are going very well in the machine building and installation sector. There is also a severe shortage of technical personnel. To find extra people to, say, install solar panels and heat pumps, wages can be further increased, Swart says.
Minimum salary
Incidentally, Swart points out that wages have already clearly increased and that the minimum wage will also increase significantly from January. This means that the retail sector, for example, won’t have much room for further increases. He also believes that the number of bankruptcies is likely to increase. As more people will be available on the labor market and the shortage will consequently decrease, this can have a dampening effect on wage developments, according to the economist.
Last month, De Nederlandsche Bank (DNB) chairman Klaas Knot called for further wage increases to limit the loss of purchasing power. According to him, wages could increase by an average of 5 to 7%. The DNB president acknowledged that there are big differences because some industries are heavily burdened by high energy prices. “But there are also sectors that have record profitability, like commerce and manufacturing,” Knot says.