The Aruba Chamber of Commerce (KvK) is questioning the proposal to link the minimum wage to the subsistence minimum. Executive Director Martijn Balkestein said the current figure may not reflect today’s cost of living and warned that a significant increase could put pressure on businesses and the economy if household incomes and business conditions are not considered.
Balkestein explained that current legislation limits minimum wage increases based on inflation, measured by the Consumer Price Index (CPI). It does not allow for the increase being discussed, which could reach 33%.
Preparations for new legislation are reportedly underway, but Balkestein said Parliament has not been informed about the details, making it difficult to assess the proposal’s potential impact.
The KvK also questions the data used to calculate the subsistence minimum. The figure is based on a Central Bureau of Statistics (CBS) income and expenses survey conducted in 2006 and a calculation made in 2010.
Balkestein noted that household expenses have changed since then, with housing and food prices rising sharply while some imported products, such as clothing, may have become cheaper. He therefore believes the current figure may no longer accurately reflect households’ economic circumstances.
The KvK believes the subsistence minimum should be reassessed using more recent data before it is used as the basis for minimum wage increases, to ensure that any changes reflect current living costs while taking into account the impact on businesses and the wider economy.
