Labor shortages could hurt Netherlands growth

[Mr.Val]

Labor shortages could hurt Netherlands growth

18 September 2007

The Wall Street Journal is reporting that the Dutch could face problems with economic growth if they can't solve their labor shortage problems.

The Netherlands has one of the lowest unemployment rates in the European Union; however, as the work force reaches capacity, the country could face economic stagnation.

"We could use hundreds of extra workers," says Ronald Kasteel, CEO of Ordina NV, a large information technology company in the Netherlands. Ordina blamed recent declining sales for his company on a shortage of labor.

Kasteel estimated that the Netherlands would be short of 10,000 IT experts. "The situation is very tight," he said. "We would have reached higher sales with more personnel."

The technology sector isn't the only industry feeling a shortage of workers. According to the Dutch statistics bureau, employers have trouble finding suitable candidates for one in three job vacancies, with the building and commercial services sectors facing the most shortages.

Currently, the Netherlands is showing the lowest economic growth in ten years, with a 2.5 percent growth rate in the first half of 2007. During the second half of the 1990s, economic growth stayed above 3 percent -- peaking at 4.3 percent in 1997.

Changing the labor policy for native Dutch workers may not be enough. Coomans said increasing immigration could be an alternative short-term solution in some sectors.

Recently proposed European Union legislation may come to the rescue.