The minimum wage on Saba will be increased by 7.5 per cent to US $4.96 per hour, writes the Daily Herald. As a result, the social benefits such as unemployment allowance “onderstand” and pension allowance AOV on the island will go up by 6.1 per cent.
The increase doesn’t apply to St. Eustatius or Bonaire. Dutch State Secretary of Social Affairs and Employment Jetta Klijnsma stated this in a letter she sent to the Second Chamber of the Dutch Parliament on Thursday. The increase of the minimum wage and the unemployment allowance on Saba took place at the request of the local government and employers.
The State Secretary was not prepared to increase the minimum wage to US $5.50 per hour, as the Saba Government and the employers had asked. Saba employers had informed Klijnsma during her visit to the island in July this year that they in fact already paid US $5.50 per hour since they considered this the bottom limit on Saba. Klijnsma stated that she wanted to only take a decision on the Saba proposal after she had received all relevant information and statistics on the economic development, including the Gross Domestic Product (GDP).
The Central Bureau for Statistics (CBS) has been asked to gather the necessary data. Since the results of the CBS research will only become available in the course of 2014, the State Secretary decided to take a first step to increase the minimum wage. She promised further steps after she had received the statistical information on the economic development. She motivated her decision as follows: “I have taken a good look at the Saba request and taken along all relevant aspects in my decision. I have chosen for an increase to US $4.96 per hour, instead of the requested US $5.50.” The 7.5 per cent increase consists of a 1.4 per cent increase in connection with the rise of the cost of living and an autonomous increase of 6.1 per cent. “This is a controlled step that roughly puts Saba on the same level as its sister island St. Eustatius, which has a minimum wage of US $4.97. This brings the legal minimum wage on Saba to a more realistic level,” she stated.
Employers and governments on St. Eustatius and Bonaire, which the State Secretary also visited in July, indicated that at this point in time there is no room to increase the minimum wage on these islands. The rise of the minimum wage on Saba has consequences for the social benefits “onderstand” and AOV on the island, which will go up by 6.1 per cent, so the legal minimum wage and the allowances are in keeping with each other. The budgetary effects of the increase of these social benefits on Saba are 70,000 euros. The unemployment allowance and AOV will not go up on St. Eustatius and Bonaire, because the minimum wage didn’t increase there.
The State Secretary wasn’t prepared to increase the AOV specifically for single elderly as requested by the Executive Councils of Bonaire, St. Eustatius and Saba. About 30 per cent of the AOV population is single. They have no one else in their household to share the daily cost of life with. According to Klijnsma, a specific increase of the AOV for single elderly would have a limited effect, since the majority live with a partner or family members. Currently there is one general AOV level, regardless of the living circumstance of the elderly. The State Secretary explained that people would have to be checked whether they indeed live alone when a special single person AOV is introduced. This control would result in higher execution cost. “Therefore, I don’t consider this a practicable avenue,” she stated. “An integral increase of the AOV is not an issue, with the exception of Saba. I wish to stick to the policy line that an increase of the legal minimum wage has to precede a rise in the social benefits,” Klijnsma clarified.