The Interplay Between the Legal Regulation of Minimum Wages and the Strategy of Trade Unions in the Netherlands

The interplay between the legal regulation of minimum wages and the strategy of trade unions in the Netherlands

Although the Netherlands has a legal minimum wage which is binding for all sectors, the trade unions and the employers nevertheless play an important role in determining the lowest pay. Many collective agreements include wage scales which start above the legal minimum wage. However, the gap between the lowest wage scale and the minimum wage varies over time. We will discuss the trends in the gap between collectively agreed and legal minimum wages in various sectors and suggest some explanations for these trends. We will also discuss how the incidence of low pay in the Netherlands is affected by both the legal minimum wage and the lowest wage scales in collective agreements.