National Wage Policy in the Netherlands

Abstract

The constant tendency for aggregate money wages to rise faster than total output in the post-war years has been cited frequently as the prime cause of the inflation from which the British economy has suffered during this period. The danger that unrestricted trade union pressure for higher wages would present to the maintenance of economic stability, under conditions of full employment, was stressed by Beveridge.' He considered that some form of national wages policy would be an essential feature of a full employment policy ; other economists have since emphasised the need for a greater degree of central control over wage movements.2 The trade unions, employers and successive governments have, however, firmly rejected demands that free collective bargaining should be curtailed by anything more far-reaching than voluntary restraint. Appeals for restraint have been made at frequent intervals by government spokesmen, but the only serious attempt to persuade the unions and employers to co-operate in the carrying out of such a policy was made by Sir Stafford Cripps in February, 1948, with the publication of the White Paper on Personal Incomes, Costs and Prices.3 Both sides of industry tried loyally to fulfil their pledges, but rising prices and the tightness of the labour market, which led to competitive bidding for workers and to higher earnings, eventually led the unions to end the agreement in the autumn of 1950. Since then the wageprice spiral has continued. The problem of this spiral has also faced other countries and some of them have made attempts to grapple with it by means of a national wage policy. The boldest of these experiments has been made by Holland, a country one quarter the size of Britain, but having similar democratic traditions and facing similar economic prbtems. The development of post-war wage policies in the Netherlands is, therefore, of special interest.