The consensus in politics has never been greater: the minimum wage must be increased

2023-10-11 07:19:00

Over the past fifteen years, it has barely been discussed: the minimum wage. But with the departure of Prime Minister Mark Rutte and the growing dissatisfaction with the participation society in which self-reliance was promoted, the subject is back on the political agenda. The outgoing Rutte IV cabinet already took a first step and increased the minimum wage by 10 percent on January 1.

Many parties think that is not enough. D66, Christian Union, PvdA and GroenLinks had to adjust downwards their plans to further increase the subsistence minimum during the financial policy discussions last week, but the cabinet did agree to an increase of 1.2 percent.

Fewer allowances, higher minimum wage

Why is the minimum wage back in the spotlight? According to Arjan Vliegenthart, director of Nibud, it has to do with the complex system in which people have had to make ends meet in recent years. “The minimum wage,” says Vliegenthart, “is not enough.” Therefore, additional allowances are required, ranging from childcare allowance to housing allowance. Parties want to get rid of that. Hence the call to increase the minimum wage so that the complex benefits system can be simplified and prevent a new benefits scandal.

There is reasonable consensus among virtually all political parties. VVD and CDA want to do more for the working poor and therefore believe that the minimum wage should be increased, according to the election manifestos. They do not mention an amount. Other parties do that. The Christian Union even wants to increase the social minimum to 18 euros per hour (currently it is 12.79 gross per hour) in 2028, D66 to 17.50 euros in the same year, GroenLinks-PvdA and the SP to 16 euros. The left-wing parties do not mention a year. NSC, Pieter Omtzigt’s party, is also advocating an increase, although it is still unclear exactly how much it will amount to.

And more ‘security of existence’

The consensus also has to do with the theme that dominates this election campaign: social security. With the arrival of Pieter Omtzigt and the hearings in recent weeks about the strict fraud law resulting in the benefits affair, a different wind is blowing. Parties are afraid to emphasize self-reliance, especially after many people could barely make ends meet this winter due to high energy bills and expensive groceries.

In addition, Brussels has instructed the member states to ensure that workers receive an appropriate minimum wage by law. According to the FNV trade union, this corresponds to 16 euros per hour.

In short: all signals are green to compensate the working poor more. That was different in the past. In 1984 the CDA lowered the minimum wage. In 1993, the party even advocated abolition in the run-up to the elections, intended to put a stop to high unemployment. In that respect, economic conditions are now much more favorable, because unemployment is low. “Moreover,” says Vliegenthart, “it is becoming increasingly clear that job losses will not be too bad if you increase the minimum wage.”

The question is where the border lies. The effects of the 18 euros from the Christian Union are unknown. The question is also how the increase will be financed. Because an increase in the minimum wage automatically means an increase in benefits. These have traditionally been linked in the Netherlands – unlike in other Member States.

It is precisely the reason that Ingrid Thijssen, chairman of the employers’ organization VNO-NCW, says that a minimum wage of 18 euros is disastrous for SMEs. Small and medium-sized businesses would not be able to cope with such an increase, says Thijssen.

The attitude of the employer leader is not surprising. Employer organizations never cheer when there is talk of wage increases. But unlike in the past, VNO-NCW now stands virtually alone. Even the party that generally supports employers, the VVD, wants to compensate the working poor more.