Verhoging van minimumloon en bijstand als wondermiddel voor welvaart en welbevinden van de lage inkomensgroep? [Raising the minimum wage and social assistance – a panacea for the prosperity and well-being of the low-income group?]
Income policy and poverty reduction are currently high on the political agenda, including due to the high levels of inflation. In this publication, we have examined the increase of the minimum wage and the associated increase in benefits, such as social assistance and the state pension (AOW), from 1 January 2023 and the planned switchover from a monthly to an hourly minimum wage in 2024. We have analyzed the effects of these changes on the quality of life of Dutch citizens. In addition to income, we looked at health and well-being (non-financial aspects of quality of life). Previous studies conducted by the Netherlands Institute for Social Research (SCP) tell us that low income is not only associated with financial deficits, but often also with deficits in terms of welfare in a broader sense (see, for example, Hof et al. 2021). One question relevant to policy is whether increasing low incomes will also affect welfare deficits more broadly. However, our analysis shows that raising the minimum wage and benefits will have little effect on health and well-being in the short term. This suggests that policies aimed at improving the lives of low-income people should be broader in scope than merely addressing the financial dimension or exclusively targeting high-risk groups.
