In an article from Algemeen Dagblad, Professor of Applied Economics at Erasmus School of Economics Jan van Ours clarifies the paradox of the relationship between labour and wages.
Clash between employers and employees
Have you recently taken a walk through any city centre? At almost any café or dining place, you can read a sign which says: ‘personnel needed, parttime and fulltime!’. This almost seems to be the case for almost any store. In the current labour market, the supply of labour falls short to the demand. This situation was last seen in the 60s of the past century. Employers’ organisations have announced that they don’t really want to raise wages, but want employees to work more. Employee organisations were outraged: it seemed that the only consensus between these parties is that more people should join the workforce who in theory could work, but don’t.
Finding the middle ground
According to Van Ours, the problem is quite solvable: ‘both solutions can be implemented, raising wages as well as working more. If an employer has the pressing need to hire personnel, there will be higher wages. Expanding the number of hours worked has to be done on a voluntary basis. […] If employers want people to work more, the paycheck must increase as well. If employers ask current employees to do overtime, employers don’t have to raise everyone’s wages. From this stance, the opinions of employers and employees aren’t as distant’. Another solution lies with giving certain groups of people in the workforce more opportunities. Elderly people and people with a foreign background still aren’t invited as much as they should be to job interviews. If employers are more flexible with employment terms, a lot is possible. Van Ours: ‘these times actually are very exciting, because one can see that employers become very creative to find new employees’.