Modest wage increase in first quarter of 2011

In the first quarter of this year, collectively negotiated (CAO) wages were 1.1 percent up on one year previously, the lowest wage increase since 2005. The highest increase in CAO wages (1.5 percent) was registered in the subsidised sector. Contractual wage costs were 1.5 percent up in the first quarter.

CAO wages and contractual wage costs

Lowest wage increase in public administration, highest in health care

With 1.1 percent, the CAO wage increase was considerably below the level of inflation of 2 percent in the first quarter. With 0.4 percent, CAO wages in the sector public administration showed the most modest increase so far in the first quarter of 2011. In the fourth quarter of 2010, this sector was among the highest risers.

Wages in the sector health care and welfare rose most (1.6 percent). This is partly caused by higher end-of-year bonuses granted in various CAO contracts. The wage increase in health care and welfare is also lower than in the previous quarter. The provisional results over the first quarter of 2011 are based upon 74 percent of CAO contracts.

CAO wage increase by sector, 1st quarter 2011

Contractual wage costs rise faster than CAO wage costs

In the first quarter of 2011, contractual wage costs were 1.5 percent higher than one year previously. The average wage increase is 0.4 percentage points higher than for CAO wages. The increase in wage costs in the subsidised sector was 1.6 percent, marginally above the increase in wages of 1.5 percent. With 0.9 percent, the wage increase was most modest in the public sector. Wage costs in the private sector rose by 1.6 percent, much more than the wage increase of 1 percent.

Early this year, employers’ contributions have changed. In 2011, mandatory income-based health care insurance payments by employers were raised to 7.75 percent. At the same time, the basic disability premium was brought down to 5.1 percent. The employers’ contribution to the sector fund differs for each individual employer. The contribution increase was most substantial for employers in the private sector.

Contractual wage increase by CAO sector

Monique Hartog and Dick ter Steege