ages are no longer keeping up with inflation

Wages are no longer keeping u it in ation

It is that time of the year again when Dutch employees and pensioners are greeted with a slight increase in their bank balance due to the annual increments of wages. However, this time it is hardly a cause for celebration. But why – more money should always make people jump for joy, no?

Well, for one, the maximum wage increase of 1.19% is not all that much. And two, that little bit of extra money is not nearly enough to match the infl ation rate, at an average of 3.8%. Let’s put this in context. For an average earner, making about 3000 euros, the increase is wages is about 10 euros per month, which is about 0.4% and defi nitely not a match for the infl ation.

Dutch wallets are feeling lighter than ever. Whether one is working, retired or on benefi ts, everyone can see the real-time reduction in their buying power. Groceries that use to cost 100 euros in November 2020 cost over 105 euros today. Usually, the increase in wages is calculated to match the annual infl ation; however, this year, with infl ation ranging from 3.8 to 5%, the wage rise is nowhere near enough to keep up with it. Even the tax-free workfrom-home allowance comes with the loss of travel and fuel allowance, so people’s fi nancial situation remains the same.

Infl ation is not only high, it’s also the highest in the last 40 years. But what is causing it? The primary cause are the skyrocketing energy prices. It seems obvious that if the fuel required to produce, transport and store goods gets more expensive, there will be an increase in the cost of the fi nal product as well.

The second reason, as many would have already guessed, is Covid. Even though the Dutch economy managed to bounce back rather quickly after the fi rst year of the pandemic, wave after wave of Covid mutations and the resultant lockdowns caused many businesses to face heavy losses. The closing of borders without much warning also contributed to the shortage of raw materials and supplies. Consumers took to shopping online, causing even more losses to businesses relying on footfall in stores. To literally keep the lights on – which already got more expensive due to the energy crisis – retailers bumped up the already rising prices. The whole thing became a vicious cycle that requires immediate intervention, especially when it comes to energy crisis. Moreover, it’s safe to say that all businesses and consumers alike can benefi t from a “no more hard lockdowns” rule.

Having said all that, does the Dutch government have a plan to tackle the infl ation? Here are some of the things in the pipeline:

• A plan to allocate 3 billion euros to tax relief for people with low incomes, workers and families. • The cabinet wants to increase the minimum wage by 7.5%. However, it will still be below 11 euros per hour, while the largest union FNV wants to set it at 14 euros per hour. • Lower energy prices for the elderly. • FNV wants the proposed cut to social funds to be scrapped and is asking the cabinet to establish a heat fund of three billion euros to tackle the homes with the worst energy labels (E, F and G), so that people with a low income receive a lower energy bill. • To improve purchasing power, the government plans to lessen the burden of childcare costs on parents and eventually make it free, as well as scrap VAT on fruits and vegetables to bring down the cost.

All these plans seem useful, but it is not yet known when will they come in effect. Right now, it seems all Dutch people can do is pinch pennies and go discount hunting.

Average infl ation on a monthly and yearly basis

Average infl ation in the Netherlands

Written by Priyanka Sharma

New law set to improve gender equality at top levels of Dutch businesses

A change in the law in the Netherlands is set to improve gender equality at the top levels of businesses. The new bill aims to make the ratio between the number of men and women at top levels of large private companies more balanced. Since it went into effect on 1 January 2022, it has become mandatory for such companies to hire more women leaders.

The new law, proposed by Ministers Dekker (Legal Protection) and Van Engelshoven (Emancipation), contains two measures to promote diversity. Firstly, a ‘growth quota’ stipulates that at least one third of the supervisory boards of listed companies must consist of men and at least one third of women. This also applies to newly-appointed supervisory directors. In addition, the 5000 largest companies are required to set ‘appropriate and ambitious targets’ to ensure an even ratio of male and female leaders at the top and sub-top levels of their companies. They must report on their progress annually. In fact, out of 89 publicly listed companies, 61 already comply with the quota, as shown by the Female Board Index 2021 – ten more than in 2020.

No half measures According to the Social and Economic Council SER, which advised on the law in the report ‘Diversity in the boardroom: Time for acceleration’, there are still too few women at the top levels of businesses, and, although the number has been growing, the development has been too slow. Now, the SER has called for a more integrated approach and for more robust measures. An inclusive labour market, SER says, enables talent to be better utilized and stimulates innovation, creativity and social cohesion. Minister Dekker says: “Organisations and companies cannot afford to focus just on half of all Dutch talent. This law should therefore not actually be necessary, but it is necessary as a push for the business community to really work on diversity.” Van Engelshoven referred to the new law as “good news for equality of opportunity and for the companies themselves, because a diverse management ensures better business operations”.

Accumulation of little things Meanwhile, there are a range of other factors that still need to be addressed. Van Engelshoven mentions, for example, that more childcare facilities should be made available around the country, and that fathers should be encouraged to take more parental leave. Mariëtte Turkenburg, chair of the foundation Talent to the Top, which promotes increased diversity at top levels of organisations, says that implementing the new law “won’t come naturally to most companies”. Turkenburg explained that in her experience, a shortage of women at the top level of a business is not always caused by ‘ill will’, but is often due to what she called ‘unconscious incompetence’ in the fi eld of gender equality. She says that such incompetence consists of a ‘whole accumulation of little things’, and used the example of the job interview question ‘how will you take care of the children?’ Employers wouldn’t ask a male applicant such a question, making the children the women’s problem. Moreover, in her answer, a female applicant might show more hesitancy than a man, but the employer has the choice to value their honesty instead of considering it something negative, Turkenburg explained.

Future The ‘Balanced Male-Female Ratio Act at the top of the business community’ was passed in the Dutch Senate on 28 September 2021 and will be evaluated after fi ve years; it will be scrapped after eight years. Van Engelshoven has called the changes a ‘historical step,’ but whether the law will be a success and make a big difference remains to be seen. The effects of a similar quota in Norway introduced in 2013 have been disappointing: the intended effect of more women in top-levels business positions, more female CEOs, more top executives and more equality in pay, has been disappointing so far. Some critics may also call the new measures ‘positive discrimination’, although Turkenburg argues: “We have only really won the battle if mediocre women are appointed instead of those large numbers of mediocre men.”

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In2motivation, is an international learning and development company. Specialized in communication, leadership, coaching and Neuro-linguist Programming (NLP).

The motto for In2motivation is Leading Transformation, and we wanted to know more about this International company located in Amsterdam. For that nothing better than meeting the CEO, Ligia Koijen Ramos. We meet and had the opportunity to have a short talk with Ligia Koijen Ramos and ask her what are the challenges that leaders are facing right now and how to prepare better for the future of leadership.

How is Ligia Koijen Ramos?

I’m a philosopher, storyteller and a change master. I’ve spent the last two decades studying and working with communication, relationships and dynamic change.

What is your vision about what is a leader?

Being a leader is not a new challenge, it has always been a course in high demand, but now even more so, of course. The circumstances are very different and many of us learn to be a leader on the job. With direct progression without, in many cases, adequate learning and experience. One of the best kept secrets of leadership is ‘follow to lead’. Is still a lot of preconceptions about leading is going ahead, being strong, being the first, doing everything better than others. Leader is the one who is able to follow the others in their needs and work the talent of each one in order to bring the best to each person’s team. The leader is a great observer, a great lister, an inspiration and not so much a doer. Delivering feedback that transforms, having the courage to change and accelerate change, being able to say yes and no with the same conviction. In our courses we work on the big questions of leadership and accelerate the learning because we create the situation and test everything that is worked during the course.

It Is culture really a big obstacle?

Working with International teams for more than 20 years, gave me also notion that culture can play a big role and we need to be aware of it. But people are people, and some fundamentals of communication will work in any context.

What does the leader of the future look like?

I would say more like the leader “for” the future. Leading is a service, so the leader for the future will be even more clearly a person capable of serving others through his example, his social skills and connection. It will be the person who creates a sense of group and purpose even when people are miles or oceans apart, who has the ability to make a positive impact through words, gestures and attitude.