Companies earn more, but we see less and less of this on our pay slips: ‘Correct what has gone wrong’

Prosperity is growing in the Netherlands, but workers are seeing less and less of this on their paychecks. It appears from research from the trade union FNV: “If we had had the same distribution as in 1975, we would have earned 4,210 euros more per year.”

An increasing part of the money remains with the companies, says the trade union FNV in a report on the so-called working income relationship, AIQ. It is the part of the wealth that we see reflected in our pay.

‘Employees earn too little’

In 1975, more than 80 percent of the wealth created ended up on workers’ payslips. By 2020, this was less than 75 percent, and the central planning agency expects it to drop to 71 percent this year.

Especially in commerce, there is a big difference between what companies convert and what ends up in salary. Manager of a Gall & Gall department in Amsterdam, Alex van Stockum, can influence this. As store manager, he earns 13 euros gross per hour, and he is well satisfied with that, but he is angry about the salaries of his employees, who earn about 10 euros gross per hour.

The profit goes to the shareholders

“You must not do it for the sake of money. We are the best child in the class within Ahold Delhaize (the parent company of Gall & Gall, ed.), But also the disadvantaged child in terms of salary. Wages in the stores lag far behind. The profit is for the shareholders , and the bonuses for the board and management are very high, “says Van Stockum.

Most of the employees in the Gall & Gall department live outside the city, says Van Stockum. “It’s very strange that the people who serve residents can not live there themselves. And that while it is very difficult to find staff. I have been looking for 4 months, but to no avail.” He himself lives close to his work, but the question is how long he can keep coughing up the Amsterdam rent.

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‘Wages must be raised’

To improve the situation for workers like Van Stockum and his colleagues, companies should no longer wait to raise wages, says FNV’s union leader Petra Bolster. Especially in combination with current inflation.

“It’s a crazy phenomenon, the employee pays twice: no pay rise and a higher price at the checkout in the supermarket. Many employers say: ‘My employees are my capital, they radiate that they value their employees’. In fact – there is fighting for people. “

Call for generosity

There also seems to be consensus in policy on wage increases. Recently, Minister of Poverty Carola Schouten called on companies to investigate whether wages could be raised. Following this, Prime Minister Mark Rutte called for ‘generosity’.

The call for wage increases is not new: in 2019, he said at a VVD party conference: ‘The profits of large companies are splashing against the shelves, but the only thing that is really rising among large companies is the salaries of top executives. ‘

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Tax on companies and shareholders up

The fact that the employees in a number of collective agreements have improved in recent years is insufficient for the trade union FNV. “We need to rectify what has gone wrong. Many households can barely pay their bills due to inflation, while many companies are doing extremely well despite the pandemic and inflation,” said union leader Bolster.

It’s time, she says, for employers and wealthy people to pay more taxes. “It only seems logical to me that employers and shareholders will also pay the same amount in taxes as you and me.”

‘Very nice work’

Spiritus Alex van Stockum continues to work in the wine trade despite his commitment to a higher salary for himself and his employees.

“I’ve known a lot of customers for 11 years. I really enjoy working with people. You give them a bit of an experience, like a certain wine with a certain dish. It’s great when they come back super happy.”

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‘AIQ stable’

The employers’ organization VNO * NCW disputes the image of frugality among companies and says that wage increases are currently being negotiated for many collective agreements.

VNO * NCW also views the development of AIQ differently. “The labor income ratio has been stable since the 1990s. It is always around 73.6 percent. So I do not recognize the picture that it would fall,” says chairman Ingrid Thijssen.

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The employment income ratio explained

By working, we all make money for the Dutch economy, also known as the gross domestic product (GDP). The earned income ratio (AIQ) is the sum of all incomes – for employees and the self-employed – as part of the gross domestic product.

We can not just use the money we earn for those companies. Only part of the total amount is returned to working Dutch. The part of the wealth that we see reflected in our salary is called AIQ.

An example: a bicycle mechanic buys a used bicycle for 50 euros. An official then repairs the bike so he can sell it for 150 euros. The added value is then 100 euros.

The employee spent 3 hours renovating and for this he received 60 euros in salary. The owner of the bike shop earned 40 euros from the sale of the bike (because the added value was 100 euros). That means AIQ is 60 percent. The employee receives 60 euros from the earnings and 40 euros from the employer.


See the report here.

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