The timing of the presentation of the plans is not accidental. Today a number of companies came to the House of Representatives to explain why wages are growing less rapidly than profits and shareholder payouts – something leftist opposition parties invariably refer to as “intake inflation.”
Previously, the minimum wage had already increased by 10%, but PvdA leader Attje Kuiken explains why a new increase is needed. ‘We see that groceries are still many times more expensive than before, people are unable to make ends meet, families are in financial difficulty. Everyone must be compensated. It is urgent, because now people are faced with high prices.”
Wage-price spiral
Opinions are divided on the desirability of the plans. According to Tjerk Kroes of De Nederlandsche Bank (DNB), caution is advised to avoid the dreaded wage-price spiral. The employers’ organization VNO-NCW believes that the limit has been reached and is also against further wage increases.
Kuiken heard a different voice in the House today, including from DNB. ‘At first they seemed very critical of high wages, but now they say there’s plenty of room. I found it very consistent that all the organizations speaking today said that this is not a wage-price spiral. This is indicated by national and international economists and agencies.’
Big companies
To finance these wage increases, GroenLinks and PvdA are looking to big companies. Initially, they want a 50% fringe profit tax on anything over €10 million. Subsequently, it must be structurally increased to 30 percent, plus a tax on the purchase of own shares. “With this you can help millions of Dutch people who are now struggling to make ends meet,” says Kuiken.
According to the PvdA leader, 2.2% of inflation can be explained by companies passing on too high prices to customers. ‘If you structurally ask more of profit-making companies and if you impose taxes on share buybacks, you raise more money. Profit and work have been distorted in recent decades, we have accepted that for too long. Even the VVD thought it was a bit illogical».