CAO wage increase below level of inflation during the last eighteen months

In the first quarter of 2012, collectively negotiated (CAO) wages have risen by 1.4 percent. The increase was approximately the same as in the previous two quarters. The CAO wage increase has been below the level of inflation for more than eighteen months now. Contract labour costs grew more rapidly in the first quarter (1.8 percent), as a result of changes in employer contributions.

Inflation rate above average wage increase since third quarter of 2010

The average wage increase has been below the level of inflation since the third quarter of 2010. This was also the case in the first quarter of this year: CAO wages increased by 1.4 percent, whereas the inflation rate was 2.5 percent. The same situation occurred in 2005 and had a negative effect on the purchasing power of the Dutch population in 2005.

CAO wage increase minus inflation

Highest wage increase in sector transport and communication

In the first quarter of 2012, CAO wages increased most (1.9 percent) in the transport and communications sector. The lowest wage increase was recorded in the sector financial institutions (0.9 percent). The CAO wage increase in these two sectors in the first quarter was the same as over the entire year 2011.

Data on collective labour agreements in the sectors public administration and education over the first quarter of 2012 are not available. In these sectors, the duration period of various important collective labour agreements expired more than a year ago. 

CAO wage increase by sector

Contract labour costs 1.8 percent up

In the first quarter of 2012, contract labour costs increased by 1.8 percent. This is due to the CAO wage increase and higher employer contributions. Employer contributions to unemployment insurance schemes grew from 4.20 to 4.55 percent. The statutory income-related employer contribution into health care costs was also changed.

The increase in labour costs for the CAO sector private enterprises and the subsidised sector was 1.9 and 1.5 percent respectively in the first quarter of 2012. The difference is chiefly caused by the fact that private sector wages rose more rapidly than wages paid in the subsidised sector.

CAO wages and contract labour costs

Monique Hartog and Dick ter Steege