More purchasing power

The Caribbean Netherlands once again recorded a rise in consumer purchasing power in 2017. With a median 2.6 percent increase, the highest gain was on St Eustatius. Mainly low-income households benefited there, due to the additional increase in minimum wages and social benefits in 2017. Statistics Netherlands (CBS) reports this based on newly released figures.
Purchasing power in the Caribbean Netherlands has risen year after year since 2012. Improved purchasing power (* see explanation 1) means that incomes are rising more than the average price levels, meaning consumers can afford to purchase more goods and services. A median increase of 2.6 percent for St Eustatius means that half of the population see their spending power rise by at least 2.6 percent and the other half by less than 2.6 percent. Purchasing power fell for 45 percent of Statia’s inhabitants. On Bonaire and Saba, the (median) change in purchasing power amounted to 1.0 and 0.6 percent respectively in 2017, the lowest increase on these islands since 2012.

Highest purchasing power gain among low-income group on Statia
On St Eustatius, by far the sharpest median increase in purchasing power was recorded in the lowest income quartile (25th percentile) at 6.1 percent. Benefit recipients gained 6.3 percent. On Bonaire, purchasing power improved mainly among households in the highest income quartile (by 2.2 percent). Contrary to St Eustatius, it was predominantly the working population on Bonaire who benefited from the improvement with a rise in purchasing power of 1.6 percent.

All households benefited on St Eustatius
On St Eustatius, purchasing power developments had a positive effect across all household groups. Single households gained the most with a median rise of 5.4 percent. Purchasing power rose by more than 2 percent among single-parent families, couples with children and other multi-person households. On Bonaire, mainly households with children benefited: couples with children by 3.2 percent and single-parent families by 2.3 percent. Members of (other) multi-person households on Bonaire and Saba, on the other hand, lost some of their purchasing power.

Young and old alike have more to spend on Saba and Statia
On Saba and St Eustatius, purchasing power improved across all age groups. With a median increase of 4.8 percent, the most significant improvement for young households (under age 40) was seen on St Eustatius. This was also the age group with the greatest improvement in spending power on Bonaire, namely 2.3 percent. On St Eustatius and Saba, residents over age 60 saw their spending power improve, partly due to additional increases in statutory pension benefits (AOV) (* see explanation 2). This age group benefited by 4.6 percent on Statia and 1.1 percent on Saba. On Bonaire, the increase in AOV benefit was lower than the increase in consumer prices; the spending power of local elderly residents declined slightly as a result.

Sources:
StatLine – Caribisch NL; koopkrachtontwikkeling personen in particuliere huishoudens
https://opendata.cbs.nl/statline/#/CBS/nl/dataset/83551NED/table?dl=25074 =
https://opendata.cbs.nl/statline/#/CBS/en/dataset/83551ENG/table?ts=1567510221045?

Explanations

Explanation 1:
Purchasing power development

Purchasing power developments per person are calculated as year-on-year percentage changes in that person’s standardised 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, retirement. Furthermore, changes in household composition (e.g. a child moving out or a couple splitting up) may also result in income changes. All these changes are reflected in the dynamic purchasing power development.

Explanation 2:
Additional increase in benefits
With a view to improving livelihood security and combating poverty, each year statutory minimum wages and social benefits such as the AOV (statutory pension), the AWW (widow, widower & orphan pension) and the ‘onderstand’ (income support) in the Caribbean Netherlands are indexed on the basis of the CBS consumer price index (CPI). In addition, in 2017 the statutory minimum wages and benefits were raised further on St Eustatius (10 percent) and Saba (5.43 percent). The net increase for staturory minimum wages and social benefits on Saba amounted to 5.63 percent. On St Eustatius, due to deflation over several months of 2016, the net increase was 9.1 percent. On Bonaire, where wages and benefits were not raised, the statutory minimum wages and benefits were increased by the local rate of indexation – the year-on-year percentage change in the consumer price index – namely 0.6 percent.

Explanation 3:
Income groups
The mean standardised disposable income is calculated for each household member over 2016 and 2017. The classification into income quartile groups is based on these averages over 2016 en 2017. This is the so-called adjustment for regression-to-the-mean effects.

According to the latest forecast by Statistics Netherlands (CBS), the population of the three islands of the Caribbean Netherlands is expected to grow further from 25 thousand currently to 30 thousand by 2030. The number of older inhabitants will increase in particular.

The population forecast projects the most likely scenario for the future development of the Caribbean Dutch population. In this forecast, CBS uses a simulation model which uses research assumptions regarding birth rates, migration and life expectancy as the basis for projections. However, migration developments are especially difficult to forecast. If the number of migrants settling in the Caribbean Netherlands until 2030 is one-quarter lower than projected, the population will only go up to 28 thousand. If the number is one-quarter higher, the population will continue to increase to 33 thousand.

CBS.

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