The site DossierKoninkrijksRelaties reports that the mapping of positive and negative effects of the recommendations of the Committee for the Social Minimum of the Caribbean Netherlands is hampered by a lack of data. For this reason, Statistics Netherlands has carried out a baseline measurement.

Inducement

In October 2023, the Committee on the Social Minimum of the Caribbean Netherlands published a report in which they concluded that many households in the Caribbean Netherlands have too few resources to make ends meet.

In a letter to the House of Representatives in response to this report, several measures were announced to increase incomes on the one hand (e.g. by increasing the statutory minimum wage and benefits) and on the other hand to reduce the cost of living (e.g. by subsidizing utilities).

The Ministry of the Interior and Kingdom Relations (BZK) and the Ministry of Social Affairs and Employment (SZW) would like to monitor the positive and negative consequences that may accompany these measures. They have therefore asked Statistics Netherlands (CBS) to draw up a monitor of the macroeconomic context of the Caribbean Netherlands.

Study design

In the summer and autumn of 2024, CBS hardly had access to 2024 figures. Therefore, It was decided to draw up a so-called “baseline measurement” of the monitor, which mainly describes the economic context in the period before the measures were taken. This was done by describing available statistics on StatLine, performing additional analyses on existing data, exploring new sources of figures, and including them where possible. If available, the figures for 2024 are included.

Salaries

In the period studied (2011 to 2022), wages on Bonaire are on average lower than on St Eustatius and Saba. The statutory minimum wage was also lower on Bonaire during this period. As of July 2024, the legal minimum wage on all three islands will be $1,751 monthly.

On Bonaire, there are relatively many wages in the wage category around the statutory minimum wage. Especially in construction and industry and in jobs related to tourism (e.g. hotels and restaurants and trade), relatively high wages are around this legal minimum.

CBS does have information on the wages earned by people in the Caribbean Netherlands but does not have administrative data on how many hours they work for this purpose. Therefore, CBS cannot calculate how many people in the Caribbean Netherlands earn the statutory minimum wage. However, the latest Labour Force Survey (2022) does show that most workers in the Caribbean Netherlands indicate that they work full-time.

Incomes

In the period studied (2011 to 2022), standardized disposable incomes were also lower on Bonaire than on St Eustatius and Saba. This may partly be because wages were lower here. After all, for most households, income from work is the main source of income. Various benefits (such as social assistance and general old-age insurance) were also lower on Bonaire for a long time. From July 2024, these benefits will be the same on all three islands.

In most years, income inequality is highest on St Eustatius and lowest on Saba. Income inequality on Bonaire is relatively stable in the period 2011-2022. On St Eustatius and Saba, it seems to have decreased slightly. It should be noted that the number of inhabitants of St. Eustatius and Saba is relatively low. This can affect the stability of the statistics.

Inflation

Inflation on the three islands was around the much-mentioned standard of two percent in many periods. The big exception is the peak in 2022. Other countries also had high inflation rates at that time. Frequently cited reasons for this global spike in inflation are the recovery from the COVID19 pandemic and the Russian invasion of Ukraine.

The 2024 inflation figures in the Caribbean Netherlands are not exceptionally high. It is striking that there are relatively high price increases on Bonaire for hotels and restaurants (about 10 percent). Such inflation rates are high compared to previous years. On St Eustatius and Saba, these high price increases are not seen in the accommodation and food services sector. Whether this price increase is caused by, for example, the increases in the statutory minimum wage cannot be said based on these descriptive statistics. What is known is that a relatively large number of people in the hospitality industry earn a wage around the legal minimum.

In terms of communication costs, there were relatively large price decreases on Bonaire and St Eustatius in 2024. This decrease is caused by an additional (incidental) subsidy on internet subscriptions that took effect on 1 January 2024. This decrease is not visible for Saba, because in the fourth quarter of 2023 communication costs were already lower due to a one-off subsidy provided by the Island Council in November 2023.

Purchasing power

In the period 2012-2020, purchasing power in the Caribbean Netherlands has mostly been positive. This means that the population of the three islands has improved on average in terms of purchasing power in most years. In 2022, however, there was a law of dating purchasing power. This is because inflation was high in that year. This means that people with the same amount were able to buy less than a year earlier. This dating in purchasing power could also be seen in other countries.

For both Bonaire and St Eustatius, there was a clear increase in 2020 in terms of the purchasing power of persons whose main source of income is transfer income (e.g. benefits). Several measures were taken during that period to increase the incomes of this group. Because of the lodge numbers, the purchasing power development of this group for Saba could usually not be mapped.

Economy

The gross domestic product (GDP) on Bonaire is higher than on St Eustatius and Saba. This is because more people live on Bonaire. GDP per capita is usually highest on St Eustatius.

For Bonaire, GDP increases over time. This is due to population growth: such an increase is not seen in GDP per capita. The development of GDP for Saba is relatively constant. For St Eustatius, GDP fluctuates over time. This is because GDP on St Eustatius is strongly influenced by a few large companies on the island. These companies mainly produce for export and are dependent on regional developments in the oil sector. For all three islands, GDP dated (strongly) in 2020. This is the result of the coronavirus crisis. After that, the economy grew again on Bonaire and to a lesser extent on Saba. On St Eustatius, the economy continues to fluctuate (also in this period).

In 2020, there was a significant increase in the number of tourists visiting the islands. Tourism on Bonaire seems to have largely recovered: about as many tourists are coming to the island after the coronavirus crisis as before the crisis. The number of tourists on St Eustatius and Saba is not at the same level as before the coronavirus crisis.

Labor

Over time, the unemployment rate on Saba has been relatively low (fluctuating around three percent). Unemployment on this island is also relatively stable. On Bonaire, the unemployment rate has decreased: at the beginning of the observation period (2012-2016), the unemployment rate was about six percent and in 2022 it was three percent. The fluctuations in the unemployment rate are largest on St Eustatius.

In the period for which data are available (2012-2022), no evidence was found of the large-scale emergence of so-called “sham constructions” due to the establishment of a higher statutory minimum wage. A “sham construction” means that people start working as self-employed in a job they previously had as an employee. As a result, they retain an income and the employer does not have to pay the higher wage. In the period studied, there was no exceptional increase in the share of self-employed without personnel. The (policy-based) increases in the statutory minimum wage were less high in the period under review than in 2024.

Most employees in the Caribbean Netherlands indicate that they work full-time and have a permanent contract. This does depend on the profession that people have. For example, employees in personal services (e.g. tour guides, cooks, and bar staff) on Bonaire seem to work less often full-time.

Population

On 1 January 2024, more than 25 thousand people lived on Bonaire, 3.2 thousand on St Eustatius, and more than 2 thousand on Saba. The population has grown on Bonaire in particular: on 1 January 2011, fewer than 16 thousand people were living on this island. No such increases have occurred on St Eustatius and Saba. Population growth on these islands is more volatile. This is also due to administrative clean-ups of the population administration.

Migration is the most decisive factor for population development in the Caribbean Netherlands. Approximately 7 in 10 inhabitants on Bonaire and St Eustatius were not born in the Caribbean Netherlands. On Saba, this applies to more than three-quarters of the inhabitants.

Data management

To be able to properly monitor possible consequences of the policy, relevant statistics must be available. Figures are already available on many subjects. However, there are also opportunities for improvement concerning the statistics on the Caribbean Netherlands.

For example, the lack of administrative data on the number of hours worked is an important gap. Discussions are being held to see to what extent it is possible to make this information available. CBS is also working on new statistics that are relevant in the follow-up to the monitoring of the macroeconomic context of the Caribbean Netherlands. An example of this is gaining insight into the costs of business operations in the Caribbean Netherlands. At the request of the Ministry of Social Affairs and Employment, CBS is currently exploring whether insight can be provided into the share of wages in operating expenses and in the profitability of companies. Discussions are also being held to see if it is possible to map out the existence of problematic debts in the Caribbean Netherlands.

To be able to properly monitor any consequences of the policy, it is also important that statistics are made available on time. Since data has to be collected and processed, it always takes a while before statistics can be created and published. At the request of several ministries, CBS is investigating whether certain statistics can be made available more quickly. For example, at the request of the Ministry of the Interior and Kingdom Relations, it was investigated whether inflation figures could be published more quickly.

In addition to the availability of statistics, a correct interpretation of the figures is also important. That is why CBS has described in this baseline measurement how issues such as inflation, purchasing power and unemployment are measured.

Looking ahead

The government has (substantially) increased both the statutory minimum wage and benefits in 2024. For a limited number of sites, CBS currently has figures for 2024. For example, recent inflation figures showed that inflation in 2024 was not particularly high in the Caribbean Netherlands (with the notable exception of the price increases on Bonaire for hotels and restaurants). The available figures for 2024 regarding the labor market (number of registered job seekers on Bonaire and number of work permits) also show no exceptional developments.

CBS currently does not have data from 2024 for many statistics. Future figures should show to what extent the measures taken will ensure that residents in the Caribbean Netherlands will earn more, receive higher disposable incomes, and see their purchasing power increase. Any consequences for the economy and the labor market can also only be fully monitored at a later date.

The Ministry of the Interior and Kingdom Relations and the Ministry of Social Affairs and Employment therefore intend to ask CBS to (partially) repeat the analyses in this report in the future. One option is to display these in a dashboard in the future in which the results can be displayed visually and clearly. If possible, figures on residence permits from the Immigration and Naturalisation Service and information on the collective tax burden will also be included in the future.

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