Posted on 31 August 2008 by joost
The ‘Balkenende’ income cap
Netherlands is flat. Real, real flat. Not only the country, but also the minds of its inhabitants. We really don’t like things ‘sticking out’, be they people, cars, mountains, sore thumbs or, as I will discuss now, salaries. It makes us uneasy. We’re not used to that.
A very current discussion in .nl is the so-called ‘Balkenende norm’ or Balkenende income cap. Named after our current prime minister, this income level is deemed a reasonable maximum for anyone working in the public sector. Go over it and you are sure to be chastised. The media first, but the people quickly following.
People from the USA might find it disturbing: this income cap is a very real thing in our country. Set currently at about 160.000 euros (230k US$) this is inevitably your maximum wage if you work in the public sector. It doesn’t matter if your (privatised) company makes billions and/or if you take huge risks. ‘We’ are paying you so ‘we’ feel to have a right to maximise your salary.
It’s a sentiment most citizens across the world feel at some point, but we have managed to make it a norm.
The current discussion in .nl rages about salaries paid to CEOs in the health sector. In the last years, small parts of healthcare have been privatised and deregulated. This has brought with it all the nasty bits of capitalism: bean counters, middle management, time sheets and directors with huge salaries. In the past years some CEOs have managed to earn millions off semi-public services like home care.
I have to admit, it’s a little exorbitant.
Sorry about this picture of prime minister Jan Peter Balkenende, but he is name saint of this norm after all
The Balkenende norm is not law. Directors, even of public services, cannot be held to adhere it (only ministers of parliament and such, since they earn less than the prime minister by default). But the public outrage simply forces these people to yield to it eventually. (Or leave for the private sector, which many do.)
Private sector
There even exists a comparable norm for the private sector called the ‘Code Tabaksblat’. Named after a boardmember of Unilever, this code does not maximise salaries to that of Balkenende, but it does set rules for corporate governance, including salary. Invariably, media like de Volkskrant (people’s paper) will cry outrage when some CEO has managed to rake in millions while the stock of his company is tanking. In contrast to public sector workers though, this seldom affects salary levels. Most recent example of this is the paycheck of Anders Moberg, temporary CEO of Ahold, who had to give up a large percentage of his salary. Which still left him with many millions, of course.
Is it reasonable to presume that people who have earned a great deal in the past will meet up to my expectations and will earn less than the employed working forces in times of great losses because they are the captains who set their ship on crash course. (or will the same people who earned a great deal of money say that their bright spirits are needed for the setting of a new course in these uncertain waters in which they accidentally are sailing so they will still need a high income) The Balkenende norm should have been introduced and implmented much earlier in both sectors.
It is also a a typical Dutch idea that they think they are boring “flat” thinking people.
I was born and raised in The Netherlands and lived there till i was 40. But i have been living abroad now for many years in different places in the world.
I can tell you that the picture Dutch people have of themselves doesn’t make sense at all!
I worked in the tourist industry before and in our shop we had a good mix of people from all over the world.
It was always easy to pick out Dutch people from a crowd , They seem to be happy , loud , straightforward (often a bit rude without realising it) anything but shy ore boring let alone “flat”.
Sometimes they are a bit negative about coming from Holland…….in the first five minutes that is. After that they can tell you a lot about how good it is with being Dutch as an alternative to the rest of the world.
Is there any people in the world who can celebrate sports events so big as Dutch people covered in orange?
People from all over the world enjoy this and envy them for being so enthusiastic end warm.