10. Political and Security Environment
Although political violence rarely occurs in the highly stable and consensus-oriented Dutch society, public debate on issues such as immigration and integration policy has been contentious. While rare, there have been some politically and religiously inspired acts of violence.
The Dutch economy derives much of its strength from a stable business climate that fosters partnerships among unions, business organizations, and the government. Strikes are rarely used as a way to resolve labor disputes. With ten workdays per 1000 employees lost to industrial action, the Netherlands ranks tenth on the list of OECD countries with the lowest incidence of strikes, behind other major developed economies like the United States (four days) and Germany (three days).
11. Labor Policies and Practices
The Netherlands has a strongly regulated labor market (over 75 percent of labor contracts fall under some form of collective labor agreement) that comprises a well-educated and multilingual workforce. Labor/management relations in both the public and private sectors are generally good in a system that emphasizes the concept of social partnership between industry and labor. Although wage bargaining in the Netherlands is increasingly decentralized, there still exists a central bargaining apparatus where labor contract guidelines are established.
The terms of collective labor agreements apply to all employees in a sector, not only union members. To avoid surprises, potential investors are advised to consult with local trade unions prior to making an investment decision to determine which, if any, labor contracts apply to workers in their business sector. Collective bargaining agreements negotiated in recent years have, by and large, been accepted without protest.
Every company in the Netherlands with at least 50 workers is required by law to institute a Works Council (“Ondernemingsraad”), through which management must consult on a range of issues, including investment decisions, pension packages, and wage structures. The Social Economic Council has helpful programs on establishing employee participation that allow firms to comply with the law on Works Councils. See https://www.ser.nl/en/SER/About-the-SER/What-does-the-SER-do .
Prior to the Covid-19 outbreak, the annual unemployment rate was forecast to be 3.2 percent in 2020, well below the EU average of 6.5 percent and less than half of Eurozone unemployment. In March 2020, the Dutch government established various economic relief measures designed to preserve employment by providing Dutch corporations that suffer coronavirus-related problems with wage subsidies up to 90 percent.
The working population consists of 8.9 million persons. Workers are sought through government-operated labor exchanges, private employment firms, or direct hiring. At 47 percent, the Netherlands has the highest share of part-time workers in its workforce of all EU member states (in 2017, the EU average of part-time workers was 19 percent). A rise in female participation in the workforce led to a 37 percent increase in the share of part-time workers in the total working population. Three-quarters of women and one quarter of men work less than a 36-hour week. Labor market participation, especially by older workers, is growing, and the number of independent contractors is rapidly increasing.
To ensure continued economic growth and address the impact of an aging population, increased labor market participation is critical. The age to qualify for a state pension (AOW) will increase from age 65 to 67 by 2023. Governmental labor market policies are targeted at increasing productivity of the labor force, including the expansion of working hours. For example, access to daycare is improving in order to raise the average number of hours per week worked by women, which is 10 hours below the average of hours worked by men.
Effective July 1, 2020, the minimum wage for employees older than 20 years is €1,680 ($1,820) per month.