Reducing Inequalities in Europe
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Reducing Inequalities in Europe

How Industrial Relations and Labour Policies Can Close the Gap

Edited by Daniel Vaughan-Whitehead

International debate has recently focused on increased inequalities and the adverse effects they may have on both social and economic developments. Income inequality, now at its highest level for the past half-century, may not only undermine the sustainability of European social policy but also put at risk Europe’s sustainable recovery. A common feature of recent reports on inequality (ILO, OECD, IMF, 2015–17) is their recognition that the causes emerge from mechanisms in the world of work. The purpose of this book is to investigate the possible role of industrial relations, and labour policies more generally, in reducing these inequalities.
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Chapter 9: The Netherlands: Is the polder model behind the curve with regard to growing household income inequality?

Wiemer Salverda


The Dutch polder model has practised secular moderation of bargained wages – 25 years’ standstill of purchasing power. Regulatory capture let the minimum wage lag behind and lowered the lowest wage scales, increasing wage inequality. This combined with strong employment growth – mostly in part-time jobs, often low paid and insecure. The household employment rate remained stagnant as single-earner and dual-earner households traded places. The frequent association of higher with lower earnings within dual-earner households mitigated the effects of wage inequality on household income inequality for the persons involved, but also increased inequality as it lifted many of these households higher up the distribution vis-à-vis other households. More than half of all actual aggregate wage growth has accrued to the top decile of the income distribution. Dual-earner world households’ joint access to jobs and working hours adds an essential dimension to income inequality that the polder model has missed.

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