Current issues related to economics, (responsible) investment, pensions and income: every week an APG expert gives a clear answer to the question of the week. This time: Chief Economist Thijs Knaap and Head of Policy Peter Gortzak on the question of whether there will also be a Great Resignation in the Netherlands. “People in America are more sensitive to economic stimuli.”
The Great Resignation is the term coined in the United States to describe a recent trend in the labor market: millions of Americans (there were 47 million last year, 10 million more than in 2020) are resigning. They are generally not doing this so they can sit on the couch at home and do nothing, but because they can get a job elsewhere with better working conditions. Can we expect the same wave of resignations in the Netherlands?
Terms of employment
Gortzak and Knaap see little reason for that at this time. And there are two main reasons for this. First, Gortzak mentions that the United States has a completely different labor market than the Netherlands, which has stricter regulation through collective bargaining agreements, among other things. “Those collective agreements prevent poor working conditions. What also differs from America is that the Dutch government prevented a lot of misery with its support packages, ensuring that employees had no reason to resign. Some economists do think that those support packages were too hefty here, keeping some companies alive artificially. They may have a point, but because of that there was no reason for workers here to resign en masse, as they did in America.”
Like Gortzak, Knaap sees collective bargaining agreements as a major cause that there is less movement in the labor market here than in the United States. There, companies often don’t have a collective agreement, and terminating an employment contract is easier. This leads to dynamism: companies are more likely to lay off, and employees are more likely to look at opportunities elsewhere. “For the service sector, which is big in the Netherlands and regulated by collective agreements, this is often more difficult. A factor like a wage increase therefore affects the labor market sooner in America than in the Netherlands. What you do see here is that, for example, healthcare personnel leave salaried employment and become self-employed for more money. In the Netherlands too, there are ways of negotiating better employment conditions outside of the collective bargaining agreement.”
There was some movement in the healthcare sector, as well as in the Dutch hospitality and events industry. “There they are now reaping the bitter fruits of having been closed down by Covid for a long time,” Gortzak states. “Many people who worked in those sectors on temporary or zero-hours contracts found themselves out on the street. Many of them subsequently chose to work at the Covid test stations. That is really different from America, where people start looking for a new, better job while they’re still at an existing job. Because in the Netherlands it only involves specific sectors, you can at most speak of a Resignation, not a Great Resignation.”