Dutch unions to end policy of wage restraint?

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Within Dutch trade unions, a growing number of voices are calling for higher wage increases in 1998 and subsequent bargaining rounds. However, this probably does not signify a full break with the 15-year old policy of moderate increases in labour costs.

The largest trade union in the Netherlands, Abvakabo- which covers the civil service, social and welfare services and privatised undertakings and is affiliated to the Federation of Dutch Trade Unions (FNV) - has set as its priority increasing the purchasing power of its members over the next four years. Abvakabo wishes to reduce the disparity between pay increases in the private sector and those in the public sector. Other unions affiliated to the FNV appear to want to break away from the policy of wage restraint as well. For example, FNV-Bondgenoten, the alliance of FNV unions for transport, food, banking and services and industry, is aiming to increase wages by 1.5% above the rate of inflation in 1998. FNV-Bondgenoten is involved in 500 of the 900 collective labour agreements in the Netherlands. Owing to the rapid rise in employment, members of these unions are pressing for wage increases, and hence increased purchasing power. Firms currently often pay much higher wages than those stipulated in the collective agreements.

The chair of the FNV expects a 4% to 5% margin for wage increases in the negotiations for 1998. Two other trade union federations, Christian Federation of Trade Unions (CNV) and the Federation of Managerial and Professional Staff Unions (MHP), do not want to establish a single figure for wage increases, because the differences between the various sectors of the economy are too large. Moreover, MHP has stated that the figure of 4% to 5% may even be too little.

However, many trade unions do not want a total break with the 15-year practice of wage restraint. Instead, they are considering ways to make moderate wage increases more palatable for their members. Surveys among union members show that many workers also want reductions in workloads and improved job security by means of "investment contracts". These contracts link training and education to job guarantees, either inside or outside the firm. Such a contract has already been concluded in June 1997 by the Industrial Workers' Union affiliated to FNV (Industriebond FNV) and the Heineken brewing company (NL9707121F).

The policy of wage restraint dates from the "Wassenaar agreement" which was signed by the unions and employers' organisations within the bipartite Labour Foundation in 1982. The primary motivation for this policy was the rapidly growing unemployment and massive lay-offs at the beginning of the 1980s. In the early years, the indexation of wages to prices was exchanged for a reduction in working hours (to an average of 38 hours a week). In the period between 1984 and 1993, wage increases were exchanged for agreements on extra days off for older workers, training and education, and day-care. Since 1993, collective agreements have reduced working hours to 36 hours a week.

In the meantime, the biggest employers' organisation, VNO-NCW, has already expressed concern over the demands of the FNV chair, stressing the large number of people who are still dependent on social benefits.

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