Caribbean Netherlands: purchasing power gains subsided in 2021

© CBS

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 2021, the purchasing power of the Caribbean Dutch population continued to rise, but less sharply than in the previous year. The population of Bonaire gained 1.1 percent relative to 2020; on St Eustatius this was 0.5 percent, while Saba residents gained 0.1 percent. The highest gains were seen among people living in households with underage children and among those in employment. CBS reports this based on newly released figures.

In a bid to improve the livelihood security in the Caribbean Netherlands, a number of structural steps have been taken since 2019 to raise minimum wages and benefits, lending a boost to local purchasing power. In 2021, the child benefit was raised. The COVID-19 emergency support measures to offset income losses for employees and self-employed were still in effect. Benefits and minimum wages were not adjusted for the deflation in 2020. In 2021, rising average price levels reduced the purchasing power on Bonaire and Saba. On St Eustatius, the average price level fell slightly, which had a favourable effect on spending power.

Improvement for people in work

On all three islands, the median purchasing power improved for people in households with a primary income from employment. At 1.7 percent, Bonaire saw the largest increase in purchasing power for this group. A median purchasing power development of 1.7 percent means a gain of at least 1.7 percent for one half of the population and less than 1.7 percent for the other half. Benefit recipients on Bonaire and Saba saw their purchasing power decline as benefits were not adjusted for inflation.

More spending power for households with children

On all three islands, the median purchasing power improved for people in households with children. On Bonaire, spending power increased most strongly among the single-parent families (+3.1 percent). Spending power on Saba rose most significantly for couples with children (+2.5 percent). On St Eustatius, people in households without children also benefited from a purchasing power gain.

Young people saw greatest improvement

On all three islands, people in households with a main earner up to the age of 40 saw the greatest purchasing power improvement. They gained 2.7 percent on Bonaire, 2.5 percent on St Eustatius and 2.4 percent on Saba. The majority of these main earners are employed and in the process of climbing the career ladder. Their incomes rise as they gain more work experience and obtain better-paying jobs.

Lowest incomes on St Eustatius gain

Of all four income quartiles on St Eustatius, the quartile with the lowest incomes (bottom quartile) gained the most purchasing power at 0.9 percent; two-thirds of the people in this quartile saw improvement, mainly due to deflation and an increased child benefit. On Bonaire, the greatest improvement in median purchasing power, 2.7 percent, was seen among the households with the highest incomes (top quartile).

Sources