Social minimum in the Caribbean Netherlands

In support of the Social Minimum Committee for the Caribbean Netherlands, Amsterdam Bureau for Economics and SEO Amsterdam Economics conducted research into the economic effects of increasing the social minimum. We mapped out the socio-economic context of Bonaire, St. Eustatius and Saba, analyzed the economic effects of the committee’s proposals, provided advice on the design of the social minimum, and made recommendations for structural measures aimed at reducing the costs of livelihood.

The socio-economic context of Bonaire, St. Eustatius and Saba is favorable and offers room for increasing the social minimum, but excessive increases at once are accompanied by undesirable economic effects. With the increase in the statutory minimum wage in 2024 proposed by the committee and the related increase in social assistance, the social minimum for singles can be achieved in the short term, provided that the landlord subsidy is used on all three islands. This is not the case for families with children; according to the sample budgets from Nibud, the costs of living for these households are so high that the social minimum for this group can only reasonably be achieved with targeted contributions such as the child budget or in-kind benefits.

Although the increase in the statutory minimum wage is significant, it is expected that the adverse economic effects are manageable. That does not mean employers will not be affected; negative effects of an increase in the statutory minimum wage for employers can be mitigated by reducing employer premiums.

The research report can be found here.