Purchasing power on average 2.8 percent higher in 2007

The purchasing power of the Dutch population rose by an average of 2.8 percent in 2007, but there are significant differences between the various socio-economic groups. Over 18 percent of the population saw their purchasing power increase by more than 15 percent, whereas nearly 9 percent had to cope with a loss of purchasing power of at least 15 percent.

Change in purchasing power by income source, 2007*

Position on the labour market important

Major changes in purchasing power arise, if a person’s position on the labour market changes. The purchasing power of social security recipients who managed to find a job, for example, rose significantly in 2007; on average, by about 17 percent. Incomes of social security recipients who did not manage to find a job improved by only 1.5 percent.

Change in purchasing power 2007* by main source of income in 2006

Variable incomes

A person’s income may change considerably from one year to the next, even if their position on the labour market does not change. Incomes of self-employed are performance-related. Consequently, their purchasing power may vary considerably from year to year.

Nearly 15 percent of self-employed saw their purchasing power plummet by over 15 percent. At the same time, nearly one quarter improved their incomes by more than 15 percent. The average income increase of self-employed in the Netherlands was 2.7 percent in 2007.

Purchasing power 1997-2007*

Effect of economic situation on purchasing power

Changes in purchasing power are strongly affected by the economic situation. When the economy is booming, the purchasing power of most people will increase. Wages and social benefits go up, there is more paid overtime work and it is easier for people to find a job or improve their position on the labour market.

Wim Bos