Dutch economists Willem Vermeend and Rick van de Ploeg have identified what they consider to be five job killers that are destroying Dutch employment, reports dutchnews.nl.

According to figures out last week, the Dutch economy grew by 4% in the first quarter compared to the same period in 2014. A greater rate of investment, increased exports, and greater consumer spending are fuelling this growth. At the same time, however, unemployment stuck at around 7%. Despite the plethora of measures set out in this cabinet’s Social Accord it shows no signs of going down.

Vermeend and van de Ploeg suggest that, in order to change this, new jobs are needed. Civil servant jobs and jobs at big companies are in decline and it’s the small and medium-sized businesses and start-ups who will have to step into the breach. But their efforts are being hindered by out-of-date social security regulations and tax and premium demands.

The rise of the new labour market, increasing international competition and turnover variability will induce employers to limit their number of employees. Expectations are that the so-called “flexible layer” of the job market will grow to 40% or even more. Many small businesses have already stopped hiring people on a fixed basis.

Vermeend and van de Ploeg point out that, in order to promote employment, the Netherlands depends on small businesses and start-ups. But the climate for entrepreneurs is extremely poor. This kills off jobs and makes creating new ones very difficult.

The main job killers identified by Vermeend and van de Ploeg are:

• High employers’ contributions that can mount up to around 30% of gross salaries.
• Sick pay for two years (considered to be extreme internationally).
• Rigid fixed (collective) labour contracts that offer little room for tailor-made solutions.
• Government institutions causing a disproportionate administrative burden.
• Insufficient opportunities to apply for business loans.

Vermeend and van de Ploeg suggest that, if employment is to grow, these five stumbling blocks will have to be removed first. Politicians will also have to guard against the introduction of new job killers, such as measures aimed at limiting the number of (badly needed) self-employed workers. Incomprehensibly, the state sees these people as an expense and potential candidates for fiscal cutbacks, completely ignoring the fact that they create their own work and pay taxes.

Measures that limit their number will not only harm employment but will also generate less tax revenue for the state and bigger social security benefit pay outs. According to international research, increasing the national youth wage is another job killer. Those in favour have good arguments but should be honest enough to admit there will be fewer jobs available for youngsters. A much better solution would be to ease the cost pressure on youth wages so gross wages go up.