THE HAGUE, 16/01/07 - Pay rises under collective labour agreements (CAOs) rose 2.0 percent in 2006. This is much higher than the 2007 increase of just 0.7 percent, the Central Bureau for Statistics (CBS) reported yesterday.

Deducting 2006 inflation of 1.1 percent, the CAO-negotiated pay increase was 0.9 percent. "The difference between inflation and the pay increase has not been so large since 1999," the CBS noted. In 2005, the CAO increase was actually lower than inflation.

The figures do not automatically mean purchasing power growth. "Net pay is also dependent on the changes in premiums paid by employees for pensions, social insurance (including healthcare) and wage tax. In 2006, these effects varied widely for different employees due to the introduction of the new health insurance system."

Part of the CAO pay increase reflects special remuneration items. These were up 0.4 percent, reflecting employers contributions to the career savings scheme and health insurance costs. Excluding these, CAO pay rose by 1.6 percent.

Contractual wage-costs went up by 1.2 percent, the same as in 2005. For the first time since 2002, the increase was smaller than for CAO pay, mainly due to lower employer job-disability and (pre)pensioning premiums. In 2005, the wage-costs increase was 0.5 percentage points more than the CAO pay increase.

The transport and communications sector saw the biggest wage-costs increase at 2.4 percent. Contractual wage-costs went up by 0.2 percentage points more than CAO pay in this sector, mainly due to higher employer premiums for pensions. The smallest increases were in energy and water-piping companies, education, trade and hotels and catering.