“Shortage on the labour market will increase”, and just legislation will not fix this

Ruben Houweling

In the first quarter of 2023, the Minister of Social Affairs and Employment Karien van Gennip plans to introduce several bills to decrease the number of pseudo-freelancers and flex workers. The labour market has an increasing shortage, especially in care, education and tech. Ruben Houweling, Professor of Labour Law at Erasmus School of Law, explains the biggest challenges for the labour market of the next ten years and the proposals of the Minister. He also discusses what is necessary for the labour market and the social-economic system to make them futureproof.

The Minister wants to propose three new laws at the beginning of 2023. First, she wants to eliminate tax cuts for freelancers to decrease the financial benefits of being a freelancer. In addition, she wants to clarify the difference between employees and contractors. The resolution is to add a clear criterium in the law that automatically considers freelancers that get a too-low hourly rate as employees. Thirdly, the Minister wants the Tax Authority and the Inspection to start enforcing the rules about formally self-employed pseudo-freelancers, which are, in practice, no different than employees.

Making flex work less flexible, but fixed jobs not less fixed

In addition to the proposals on clarifying the difference between self-employed workers and employees, the Minister wants to restrict flex jobs further. For example, there will be a certification obligation for temporary employment agencies, a time limit on temp jobs, and a limited number of temporary contracts. According to Houweling, the proposals of the Minister are generally in line with the middle long-term advice of the Social Economic Council (SER MLT) and the recommendations of the Commissie Borstlap from 2020 (Committee for Regulating Work). However, there is one thing to keep in mind, according to Houweling: “Remarkably, employers are not getting much in return. Flex jobs are becoming less flexible, but fixed jobs are not made less fixed. That development could affect the solidarity that founded the agreement with SER MLT.”

Not enough people

Houweling explains that there is a clear challenge ahead of us: “the biggest issue for the next ten years will be the increasing shortage in the labour market. There are not enough people to do all the work, and the people that do work are not always working the jobs we want them to do. Our ageing population mainly causes this shortage. According to some calculations, one in four workers is needed in 2028 in healthcare. These calculations do not even discuss education and tech. In other words, the shortage is not limited to 2022 and will neither evaporate during an economic recession.” 

The proposals of Van Gennip are steps in the right direction, but according to Houweling, a lot more has to be done to solve the upcoming problems: “the proposals are good. However, the shortage in our labour market will not be solved solely with legislation but also (especially) with other ways of organising our work and lives. We have to be (even) more efficient with the labour factor and have to limit administrative tasks. Of course, AI and robots will help us in many ways, but do not expect that robots and AI will solve everything. Migrant workers will be indispensable, but they will also need a place to stay, and if I remember correctly, we have some issues regarding building homes, so everything comes together and are currently not making things easy.”

New social-economic model

According to the Professor of Labour Law at Erasmus University, the Dutch social-economic system has to be completely restructured to make our country futureproof: “What lacks is a new social-economic model for The Netherlands. What will our society look like in 2050? Is that a society in which profit maximisation is still our focus, or do we opt for a (different) approach to wealth? What learning and labour paths fit this new economy and social construct? How will public tasks and private actors fit in that society? We currently manage the process (making flex less flexible, for example) but fail to grasp what this process should lead to. That realisation is increasingly visible in the right places [and to the right parties]. So, I am optimistic.”

More information

Click here for the episode “Vooruitblik op de arbeidsmarkt van 2023” of BNR Werkverkenners with Ruben Houweling (in Dutch).

Read more about the plan of Karien van Gennip (in Dutch).

And watch the episode 'Geld of je leven' of NPO Radio 1 with Ruben Houweling (in Dutch). 

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