Caribbean Netherlands: purchasing power gains in 2020

A vegetable stall in the Caribbean Netherlands.
© Cees Timmers

Erratum:

It was recently determined that the Income Tax source data used for this publication were incomplete. As a result, the income for some households has not been properly determined. Statistics Netherlands is working on a revision of the results.

Initial estimates indicate that deviations have arisen since 2016 and have increased by 2020 to an underestimation of the income of the entire population in the order of 3 to 13 percent, depending on the chosen statistic. New results will be published in June for 2021 and 2022, after which the previous years will also be revised based on the current data.
In 2020, the population of the Caribbean Netherlands saw gains in purchasing power again. On Bonaire, the year-on-year increase in median purchasing power amounted to 4.2 percent; on St Eustatius 2.4 percent and on Saba 4.1 percent. The highest purchasing power gains were seen among people living on benefits and among families with underage children. Statistics Netherlands (CBS) reports this on the basis of newly released figures.

From 2012 to 2017 inclusive, the median purchasing power in the Caribbean Netherlands improved each consecutive year. On Bonaire and Saba, average price levels increased more rapidly than incomes in 2018, leading to purchasing power loss for the first time. A number of steps were taken as of 2019 to improve livelihood security, lending a boost to the purchasing power on all three islands. In 2020, the child benefit was raised by more than 30 percent. Social benefits and the statutory minimum wage received a supplemental increase as well. Thanks to the coronavirus emergency support to local companies, employee jobs were not lost and wages were not reduced in 2020. Self-employed entrepreneurs were also compensated for their income loss. Furthermore, in 2020, average price levels fell on all three islands, which had a positive effect on purchasing power.

More spending power for people in work and benefit recipients

In households with a primary income from work, the median purchasing power improved by 3.9 percent on both Bonaire and Saba. A median purchasing power development of 3.9 percent means that half of the population gain at least 3.9 percent and the other half lose at least 3.9 percent. On St Eustatius, people in work saw their purchasing power improve by 1.6 percent. On Bonaire, persons living in households with benefits as the main income source gained the most in terms of purchasing power, namely 9 percent. Less than one in five persons in these households suffered a loss of purchasing power.

Purchasing power gain in households with young children

On all three islands, the median purchasing power rose for all types of households. Due to the raised child benefit, the improvement was mainly seen in households with underage children. The largest improvement was seen among single parents on Bonaire and Saba: for them, spending power increased by 7.4 and 6.1 percent, respectively.

Young people benefit most

On all three islands, the rise in median purchasing power occurred across all age groups. Among households with a main earner aged 40 or under, the purchasing power rose by 5.2 percent on Bonaire; this was 4.2 percent on St Eustatius and 5.9 percent on Saba. Such households are more likely to include underage children, which means they gained as a result of the raised child benefit. For people aged 60 and over, the raised AOV benefit contributed to higher purchasing power.

Six-percent gain for low-income households on Bonaire

In 2020, purchasing power rose across all income quartiles. On Bonaire, the greatest improvement was seen among households in the poorest quartile (bottom 25%), namely 6.1 percent. On St Eustatius and Saba as well, the bottom quartile gained the most: 4.5 and 4.8 percent, respectively. Households in the wealthiest quartile (top 25%) on Saba gained considerably as well with 4.7 percent higher purchasing power.

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