The disposable income of Dutch households was 1.7% higher in the first quarter than twelve months earlier. According to economics professor Arnoud Boot, this has to do with all sorts of adjustments, such as an increase in collective bargaining agreements and minimum wages, and a slight increase in the number of hours. “We are pampering everyone.”
However, Boot doesn’t see it as purely positive that households haven’t deteriorated overall over the past year, despite high inflation. “We have that inflation because we’re pampering everyone. Everyone, and this also applies to the average employee».
Compensate
In times of economic shocks, according to Boot, there are always groups who come off terribly, people who fall between two stools. And that’s exactly what politicians currently allow too little, he believes. “You see in the House of Representatives and the Cabinet that everyone has to be brought up, no one can drown, and that means the average is getting better.”
According to Boot, the big problem is that the government wants to compensate everyone for high inflation. As a result, even people who can actually bear the higher costs benefit significantly. This further fuels inflation and the vicious circle is complete. ‘You have a government that increases spending in all sorts of ways and you also have employees who spend money like crazy. So you have high demand and supply pressure, and that’s inflation.’
To cuddle
According to Boot, the fact that employees have also started working longer hours in the last year can be explained by the persistent shortage in the labor market. If employers have great difficulty retaining their employees, they are more inclined to accommodate employees to things like working from home and flexible working hours. ‘It’s cuddling again.’
Boot is concerned for the younger generation, who he says are unlucky not through lack of pampering, but through lack of sense of direction. Also caused by all kinds of, yes, pampering. “During the coronavirus, all students could stay at home and now we can no longer let them into the classroom early in the morning. People are literally stuck on how to organize their lives, and that means another blow to the supply of the economy. It’s not that the younger generation is lazy, but there is a mental shock going through society that has a huge influence on the supply of the economy.’
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.
