The number of collective agreements stipulated is breaking records, employers seem sensitive to the instrument of the strike. In the last months 47 ultimatums led to 32 strikes, roughly, the striking employees were rewarded with 100 euros gross. BNR’s in-house economist Han de Jong believes this is partly due to the tight labor market.
According to De Jong, employers are not insensitive to the needs of their employees who are faced with persistent inflation. Even what plays a role: public opinion on the side of employees. De Jong does not rule out the possibility that there is simply room for wage increases. “Perhaps it’s also true that many companies have room to raise wages quite sharply.”
Wage-price spiral
According to the employers’ club AWV, the wage increase is 8.2%, employers, as well as De Nederlandsche Bank, are warning of a wage-price spiral. “It’s lurking or it may have already started,” says De Jong, who also has an eye for the position of the FNV union. “The union movement also looks to the long term”.
Economists look at the so-called labor income share, the share of our national income that goes to employees. According to De Jong, that quotation is lower than 30 years ago. “So from their point of view, a pay raise is an understandable goal.”
In the meantime, we have to wait for what the US central bank will do at the Fed today: another interest rate hike or a slowdown? De Jong suspects the latter because inflation in the US is stabilizing somewhat and because the interest rate weapon always works with a lag. “If you keep raising interest rates until you hit your inflation target, you’ll likely go bankrupt.”
And that would mean unnecessary damage to your own economy. De Jong therefore thinks the Fed will pause to take a closer look at inflation data in the coming months. There’s not a very clear picture, but the Fed has already raised interest rates 10 times in a row to an unprecedented rate.
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
