Summary

Background

In October 2023, the Minimum Income Standard Committee of the Caribbean Netherlands published a report in which it concluded that many households in the Caribbean Netherlands are unable to make ends meet.

In response to this report, the Dutch government announced several measures to boost incomes (e.g. by increasing the statutory minimum wage and benefits) and reduce the cost of living (e.g. by providing allowances to cover utility costs).

The Ministry of the Interior and Kingdom Relations (BZK) and the Ministry of Social Affairs and Employment (SZW) are keen to monitor the positive and negative effects that may be associated with these measures. For this reason, they asked Statistics Netherlands (CBS) to monitor the macroeconomic situation in the Caribbean Netherlands.

Research design

In the summer and autumn of 2024, CBS had hardly any figures available on 2024 yet. The decision was therefore made to conduct a baseline measurement for the monitor first, mainly relating to the economic conditions prior to the measures being taken. This was done by describing the statistics available in StatLine, carrying out some additional analyses on the existing data, and exploring and including new data sources where possible. The 2024 figures are included where available.

Wages

Average wages were lower on Bonaire than on St Eustatius and Saba during the period studied (2011-22). The statutory minimum wage was also lower on Bonaire during this period. Since July 2024, the statutory minimum wage on all three islands has been $1,751 per month.

On Bonaire, the wages of a relatively large number of people are at or close to the statutory minimum. Particularly in the construction sector and manufacturing sector, and in jobs related to tourism (e.g. the accommodation and food services sector and retail), a relatively high proportion of wages are around the statutory minimum.

While CBS has information on the wages earned by individuals in the Caribbean Netherlands, it does not have administrative data on how many hours they work in order to earn those wages. This means that CBS cannot calculate how many people in the Caribbean Netherlands actually earn the statutory minimum wage. However, the latest Labour Force Survey (2022) does show that most working people in the Caribbean Netherlands say they work full-time.

Incomes

Standardised disposable incomes were also lower on Bonaire than on St Eustatius and Saba during the period studied (2011-22). This may be partly because wages were lower on Bonaire. After all, for most households, income derived from work is the main source of income. For a long time, various benefits (such as Social Relief and the General Old Age Pension) were also lower on Bonaire. Since July 2024, these benefits have been equalised across all three islands.

In most years, income inequality is highest on St Eustatius and lowest on Saba. Income inequality was relatively stable on Bonaire from 2011 to 2022, while on St Eustatius and Saba it seems to have decreased slightly. It should be noted, however, that the populations of St Eustatius and Saba are relatively small and this may lead to greater fluctuations in the figures.

Inflation

Inflation on all three islands has generally been around the frequently mentioned standard of two percent. The major exception was the spike in inflation that occurred in 2022. Other countries also experienced high inflation during that period. The reasons cited the most frequently for this global spike in inflation are the post-pandemic economic recovery and Russia’s invasion of Ukraine.

Inflation in the Caribbean Netherlands has not been particularly high in 2024. It is worth noting, however, that there have been relatively large price increases for hotels and restaurants (of around 10 percent) on Bonaire. This is a high rate of inflation compared to previous years. These high price increases are not evident in the same sector on St Eustatius and Saba. It is not possible to say from these descriptive statistics whether these price increases are being caused by the increase in the statutory minimum wage. However, we do know that a relatively high number of workers in the accommodation and food services sector earn wages around the statutory minimum.

Turning to communication costs, Bonaire and St Eustatius saw relatively large price drops in 2024. This was caused by an extra (one-off) allowance for internet connectivity that was introduced on 1 January. No such drop was seen on Saba because communication costs were already lower in Q4 2023 because of a one-off allowance provided by the Island Council in November 2023.

Purchasing power

Between 2012 and 2020, purchasing power in the Caribbean Netherlands moved mainly in a positive direction. This means that the position of the population of the three islands improved on average in most years, with respect to purchasing power. There was a decline in purchasing power in 2022, however. This was because inflation was high that year. This means that individuals were able to buy less with the same amount of money than one year earlier. A similar drop in purchasing power was also seen in other countries.

For both Bonaire and St Eustatius, 2020 saw a marked increase in the purchasing power of individuals whose main source of income is income transfers (such as welfare benefits). Several measures were taken during that period to boost the incomes of this group. For Saba changes in the purchasing power of this group could not usually be measured due to the small numbers of individuals involved.

Economy

The gross domestic product (GDP) of Bonaire is larger than that of St Eustatius and Saba. This is because more people live on Bonaire. On the other hand, GDP per capita is highest on St Eustatius.

Bonaire’s GDP has increased over time. This has been a result of population growth, and there has been no increase in GDP per capita. Saba’s GDP has been relatively constant. St Eustatius’s GDP has fluctuated over time because it has been affected by a few large companies located on the island. Their production is mainly export-oriented and depends on the regional oil sector. All three islands saw a (sharp) drop in GDP in 2020. This was due to the coronavirus pandemic. After that, economic growth resumed in Bonaire and, to a lesser extent, Saba. On St Eustatius, economic output continued to fluctuate.

In 2020, there was a significant drop in the number of tourists visiting the islands. Tourism on Bonaire largely seems to have recovered: about the same number of tourists are visiting the island as did before the coronavirus pandemic. The number of tourists visiting St Eustatius and Saba, on the other hand, has not reached the same level as before the pandemic.

Labour

Historically, Saba’s unemployment rate has been relatively low (at around three percent), and is also relatively stable. Unemployment on Bonaire has dropped: at the beginning of the period studied (2012-2016), the unemployment rate was around 6 percent, and in 2022 it was 3 percent. Fluctuations in unemployment are the largest on St Eustatius.

In the period for which data are available (2012-2022), there was no evidence of the widespread adoption of ‘pseudo’ self-employed status following the introduction of the higher statutory minimum wage. This phenomenon occurs when employees change their official status to self-employed, even though in practice they continue to do the same work as previously. This enables them to continue earning, while their employer can avoid having to pay the higher wage. There was no unusual increase in the share of self-employed persons in the period studied. Increases in the statutory minimum wage during the period studied were lower than they were in 2024.

Most workers in the Caribbean Netherlands report working full-time and have a permanent employment contract. This does depend on what type of work they do, however. Workers on Bonaire providing personal services (e.g. tour guides, cooks and bar staff), for instance, seem to be less likely to work full-time.

Population

On 1 January 2024, there were more than 25 thousand people living on Bonaire, 3.2 thousand on St. Eustatius and just over 2 thousand on Saba. The population of Bonaire has grown, in particular: on 1 January 2011, there were less than 16 thousand people living on the island. No such increase has occurred on St Eustatius and Saba. Population growth on these islands tends to fluctuate more. This is also due to successive administrative corrections to population records.

Migration is the main determinant of population change in the Caribbean Netherlands. Around 7 in 10 residents on Bonaire and St Eustatius were not born in the Caribbean Netherlands. On Saba, more than three-quarters of inhabitants were born outside the Caribbean Netherlands.

Data management

To monitor the potential impact of policies effectively, it is essential that relevant statistics are available. Figures on many subjects are already available. However, there are also opportunities for improvement when it comes to statistics on the Caribbean Netherlands.

There is a significant lack of administrative data on the number of hours worked, for instance. Discussions are underway to ascertain whether it is possible to make this information available. CBS is also working on new statistics that will be relevant to the continued monitoring of the macroeconomic situation in the Caribbean Netherlands. This could include providing a better insight into the cost of doing business in the Caribbean Netherlands. Currently, at the request of the Ministry of Social Affairs and Employment, CBS is exploring whether more insight can be provided into the share of operating expenses that go towards wages, and into the profitability of companies. Discussions are also being held to see whether it is possible to identify problematic debts in the Caribbean Netherlands.

In order to monitor the effectiveness of policies properly, it is also important that statistics are published in a timely manner. This involves collecting and processing data, and so it will always take time before the statistics can be created and published. However, at the request of several ministries, CBS is investigating whether certain statistics can be made available more rapidly. For example, the possibility of publishing inflation figures more quickly was explored at the request of the Ministry of the Interior and Kingdom Relations.

In addition to making statistics available, it is also important that those statistics are interpreted properly. For this reason, in this baseline measurement, CBS has described how phenomena such as inflation, purchasing power and unemployment are measured.

Looking ahead

The cabinet increased both the statutory minimum wage and benefits substantially in 2024. CBS currently only has 2024 figures available in a limited number of areas. For example, recent inflation figures have shown that inflation was not particularly high in the Caribbean Netherlands in 2024 (with the notable exception of price increases for hotels and restaurants on Bonaire). Neither do the figures on the labour market (number of registered job seekers on Bonaire and number of employment permits) that are currently available for 2024 show any exceptional changes.

For many statistics, CBS currently has no data available for 2024. Future figures will need to show to what extent the measures undertaken ensure that residents of the Caribbean Netherlands are actually earning more, enjoying higher disposable incomes and seeing their purchasing power improve. Similarly, the effects on the economy and the labour market can only be fully evaluated at a later date.

The ministries therefore intend to ask CBS to repeat (part of) the analyses in this report in the future. One option will be to display these figures clearly using a dashboard in the future – a single webpage where all relevant results can be consulted easily. If possible, figures on residence permits from the Dutch Immigration and Naturalisation Service (IND) and information on the tax and social security burden will also be included.

Overview of key indicators

The following summary tables show some key figures from the report for each of the islands.