CBS reports gains in purchasing power gains in Caribbean Netherlands in 2020

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.

A 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 from 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.

Definitions:

Purchasing power development
Purchasing power developments per person are calculated as year-on-year percentage changes in that person’s standardized disposable household income, adjusted for price changes. These percentage-based income changes are ranked from high to low, with the middle or median value reflecting the purchasing power development of that particular (sub)population. Personal (dynamic) purchasing power may fluctuate for all kinds of reasons, for example, a wage increase, a promotion, taking up of a (new) job, or retirement. Furthermore, changes in household composition (e.g. a child moving out or a couple separating) may also result in income changes. All these changes are reflected in the dynamic purchasing power development.
For 2020, purchasing power was calculated for the same group of people as in 2019.

Improvement of livelihood security

In 2020, the Dutch Ministry of Social Affairs and Employment (SZW) implemented a supplemental increase in statutory minimum wages and benefits such as the ‘Onderstand’ (income support), AOV (statutory pension) and AWW (widow, widower and orphan pension), adding 5.2 and 5.0 percent on top of the annual indexation, respectively. Moreover, income supplements were introduced for AOV benefit recipients living independently; and the Onderstand income support was raised for people with permanent and full disabilities. The extra work disablement allowance was abolished on Saba. The child benefit was raised by more
than 30 percent, resulting in monthly payments per child of 83, 85 and 84 US Dollars for Bonaire, Sint Eustatius and Saba, respectively.

Emergency support

In 2020, during the coronavirus pandemic, the Dutch Cabinet introduced a subsidy scheme for wage costs (employers) and loss of income (self-employed) in order to minimize the financial impact of the coronavirus crisis.
Income quartiles
The mean standardized disposable income was calculated for each household member over the years 2019 and 2020. The classification into income quartiles is based on these mean values for 2019 and 2020; this is the so-called adjustment for regression-to-the-mean effects. The income quartiles have been determined for each individual island.

CBS

Saba represented at Arnhem's Emancipation Day celebration
Island Council concludes visit to the Netherlands

Leave a Reply

Your email address will not be published. Required fields are marked *