Inclusive growth through collective bargaining in the Netherlands

In recent years, there is a growing interest in the relationship between economic growth and inequality. More and more it is recognised that economic growth has not equally benefitted all and has been translated in growing differences in income and wealth. With these observations, the call for inclusive growth is strengthening. Inclusive growth is defined by the OECD as “economic growth that creates the opportunity for all segments of the population and distributes the dividends of increased prosperity both in monetary and non-monetary terms, fairly across society”. Relatively little attention is given to the role of wages and labour market institutions: how wages relate to growth, i.e. is wage growth a result of economic growth or can it also be a source of it; how wage setting, and in particular wage setting through collective bargaining, influences inequality; and what the respective objectives and strategies of trade unions and employers’ organisations are. In this paper we consider these questions for the Netherlands, discussing the entire economy in general and giving special
attention to the metal sector and the retail sector.