An analysis published by EA News on October 23 has set out, in detailed figures, the economic and fiscal cost of raising Aruba’s minimum wage to the subsistence level, while a follow-up EA News analysis on October 24 asked whether the proposal is a decision of principle or a political move and listed five measures it says must accompany any increase.
EA News attributes its central figures to the Department of Labor and Research (DAO), as reported in its analysis. According to those figures, about 20,526 private-sector workers in Aruba — 43 percent — earn less than the subsistence minimum of Afl. 2,683 per month. The current minimum wage is Afl. 2,007.05 per month, so reaching Afl. 2,683 would mean an increase of Afl. 675.95 per worker.
What the increase could cost employers
In its analysis, EA News calculates that reaching the subsistence level would cost an employer about Afl. 844.94 per employee once employer contributions of around 25 percent are included. Assuming a smaller average increase of Afl. 400 per month, the analysis estimates a total private-sector cost of Afl. 98.5 million in direct wages, rising to Afl. 123.2 million when employer charges are included.
The analysis also examines a phased proposal attributed to a member of parliament, under which the hourly wage would rise by Afl. 1.33 over three years. On that path, EA News estimates costs of roughly Afl. 71 million in 2027, Afl. 142 million in 2028 and Afl. 213 million in 2029.
EA News notes a qualification in the DAO figures: they exclude tips. It reports that AHATA confirmed in 2019 that many hotel and hospitality workers earn significant tips, and that around 5,500 to 6,000 workers may appear below the subsistence line on paper only.
Mansur questions how it will be financed
Former politician Miguel Mansur, in comments reported by NoticiaCla on October 23, questioned how the government plans to finance a minimum-wage increase without putting more pressure on businesses, consumers and public finances. Mansur cited the same scale of figures — 20,526 private-sector workers below Afl. 2,683, and an estimated cost of about Afl. 123.2 million a year for an average Afl. 400 rise including employer costs — while also noting the exclusion of tip income.
Mansur argued, as reported by NoticiaCla, that cutting profit tax would not be enough to compensate businesses. EA News makes a similar point, saying a profit-tax cut of 1 to 1.5 percent would offset only a small share for profitable firms and nothing for loss-making ones. Mansur demanded reform, spending cuts and a sustainable plan, saying workers deserve better pay but businesses and consumers may pay the price without one.
Pressure on public finances and the Bonaire comparison
The EA News analysis points to existing government commitments — including repair allowances, social assistance, disability benefits and education salaries — with a fiscal impact of about Afl. 147 million in 2026, projected to reach Afl. 180 million by 2030. Government revenue for 2026 is projected at about Afl. 1,945 million.
For comparison, the analysis notes that Bonaire raised its minimum wage by 41.6 percent in 2023-24 while cutting employer contributions from 13.4 percent to 10.3 percent.
Five measures the October 24 analysis says must follow
In its October 24 analysis, EA News frames the proposal as a rise toward approximately Afl. 2,700 per month — almost 35 percent above the current Afl. 11.58 per hour, or about Afl. 2,007 per month for a 40-hour week, since January 1, 2026. For a company with 20 minimum-wage employees, it calculates roughly Afl. 13,860 extra in gross wages per month, excluding additional labour costs, and warns that smaller businesses could respond by raising prices, cutting hours or postponing contracts.
The October 24 analysis lists five accompanying measures: lower the cost of living, including food, electricity, water and housing; review the BBO and overall fiscal pressure; protect small and medium businesses through dialogue, less bureaucracy and productivity incentives; strengthen competition and price transparency; and invest in productivity and education. It concludes, as analysis, that the government must present the complete plan with concrete figures and projections.
Sources: EA News | NoticiaCla | EA News analysis
