Has our purchasing power gone up or down?
Purchasing power trends are the year-on-year change in people’s income, adjusted for price changes. In 2019, the purchasing power of the Dutch population increased relative to 2018, but not for everyone. The purchasing power of more than 62 percent of the Dutch population improved, compared to 38 percent who experienced a decline in theirs. A relative majority of young people and the elderly were better off.
The purchasing power of the averagenoot1 Dutch resident went up by 1.3 percent in 2019. Viewed from the perspective of an average household, this amounts to an increase of 455 euros. This was the sixth year in a row that saw an increase in purchasing power and a larger rise than in the two previous years. One of the reasons for the positive development in purchasing power was the largest collective wage increase in ten years (2.5 percent). In addition, various tax measures had a positive effect on purchasing power. In particular, the increase in the general tax credit and the income tax cuts left many households with more income. However, the rise in purchasing power in 2019 was tempered by the largest increase in consumer prices after 2002 (2.6 percent).
Since 2000, purchasing power only declined in 2005 and in the years 2010–2013 as a result of the economic crisis. Those years also saw more people experience a decline rather than a rise in purchasing power.
|Year||Median purchasing power development|
|* provisional figures|
Purchasing power increased among all groups of the population in 2019, with employees experiencing the highest with 2.5 percent. In addition to benefiting from the agreed collective wage increase, employees can also boost their purchasing power by seeking to either work more hours or get a better-paid job. Conversely, (temporary) job losses or choosing to work fewer hours are among reasons for a fall in purchasing power among 35 percent of employees.
For pensioners, purchasing power rose by an average of 0.5 percent in 2019. In 2017 and 2018 this group had experienced a drop in their purchasing power. Unlike employees, retired people have little or no opportunity to improve their own purchasing power and are much more dependent on government measures that affect purchasing power. In 2019, pensioners benefited relatively much from the increase of the general tax credit. Households on income support saw a relatively small increase in purchasing power with an average of 0.6 percent. However, 36 percent of this group saw their purchasing power fall.
Couples with children and single-parent families saw the largest increases, while singles and couples without children experienced the smallest improvements in purchasing power.
|Social assistance benefit||0.6|
type of household
Purchasing power trends are defined as the median of individual changes in purchasing power: the change in purchasing power whereby exactly half of everyone is below the median and the other half above it.