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Two thirds gained more purchasing power in 2020, the self-employed made much less progress

Despite the corona crisis, most households had more to spend in 2020 than the year before. According to Statistics Netherlands, purchasing power has increased by 2.2 percent on average. That is the highest increase since 2016. The increase is mainly due to the wage increases that were agreed before the corona outbreak.

Not everyone got more. Two-thirds of households had more to spend, while purchasing power declined in one-third. Employees in particular benefited, which was the case for 7 out of 10. While the group of employees who benefited increased last year, the number of self-employed people who had more left fell. Among self-employed entrepreneurs, slightly more than half increased in purchasing power.

The increase in purchasing power at 4.5 percent was highest among couples with children, while the increase was smallest among retirees at 1 percent.

Much smaller increase in purchasing power this year

For many workers, wage increases had already been agreed in collective labor agreements before the corona crisis. Collectively negotiated wages rose by 2.9 percent in 2020, while prices rose less rapidly, partly due to the corona crisis. So, on balance, there was more money left over. Tax breaks for workers from the government also led to more purchasing power.

The outlook for the current year is much bleaker. Inflation will rise to well above 2 percent. At the same time, employers put a brake on wage increases in collective labor agreements. The Central Planning Bureau therefore expects a much smaller increase in purchasing power for this year and for next year the increase in purchasing power will remain at 0 percent, according to the latest estimate.

Two thirds gained more purchasing power in 2020, the self-employed made much less progress
Source link Two thirds gained more purchasing power in 2020, the self-employed made much less progress

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