The report
The study was conducted by consultancy firm Berenschot, commissioned by Cedris and Divosa. Wage cost subsidies cover the difference between an employee's productivity (wage value) and the minimum wage. This compensates employers. The study shows that the benefits of using this instrument far exceed the costs. The report includes a calculation tool for self-evaluation at the national and municipal levels. Erik Dannenberg, chairman of Divosa: "We've always heard positive stories about the use of wage cost subsidies, but we wanted to see a well-substantiated overview of the actual results. They are even more positive than expected. So it's truly worth the investment." Mohamed El Mokaddem, chairman of Cedris, adds: "There's absolutely no reason now to stop using wage cost subsidies. The national government is stealing from its own pockets by not investing more in this area."
Results
The analysis shows that the benefits are becoming visible in various areas. For individuals, it means greater security of existence and higher well-being, for the economy, increased productivity and reduced labor shortages, and for society, reduced welfare benefits and healthcare costs. Safety also increases due to a reduced risk of crime. Experience shows that the wage cost subsidy is a successful tool. In 2022, municipalities and social development companies used it to help 33.000 people find work. However, many more people could benefit from it. "We're currently seeing at least 125.000 people involuntarily sidelined, even though they're eager to get back to work. This CBA shows that we can easily recoup the investment. That's not only good for the people, but also a financially sound decision," says Mohamed el Mokaddem, chairman of Cedris.
Call to the Government
The CBA shows that investments pay for themselves. At the same time, these benefits are not evenly distributed. They often fall to the national government, while municipalities are insufficiently compensated to cover the costs of wage subsidies, support, and reintegration. Therefore, it is crucial that the national government facilitates this investment. Divosa chair Dannenberg: "Our call to the parties forming the coalition government is therefore to invest €250 million structurally in wage subsidies in the coming years and to ensure cost-covering financing. This will help an additional 40.000 people find work. Ultimately, that is an investment for the whole of the Netherlands."
Source: press release Cedris and Divosa