In the News

Netherlands raises their minimum wage by 10%

Geoff Riley

21st September 2022

To help combat the risk of more than a million Dutch families falling into poverty because of rising prices, the government in the Netherlands has announced a 10% rise in their minimum wage.

Other European countries have raised the legal pay floor in recent months, but this is the biggest increase seen among EU countries. Welfare benefits will also rise, part-funded by the introduction of a windfall tax.

The Dutch government has also benefitted from rising tax revenues on the profits from gas fields and their national debt remains low by EU standards at less than 50% of GDP giving them leeway for fiscal interventions during the energy crisis.

This is a pretty significant labour market intervention by the Dutch government. A 10% rise in the legal pay floor is designed to protect the real wages of lower-paid workers during the cost-of-living crisis. Students might want to examine the benefits and risks of such an approach.

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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