The Aruba Chamber of Commerce and Industry (KvK) has warned of serious economic consequences if the government links the minimum wage to the subsistence minimum (bestaansminimum) without further research, in comments reported October 27.
KvK director Martijn Balkenstein set out the chamber’s position at a press conference and in a meeting of Parliament’s standing committee on Economic Affairs and Primary Sector, held with other unions and business groups (gremios). He said the government is preparing a new law to improve purchasing power, using a study by Economische Bureau Amsterdam, although there was no clarity in Parliament itself about the law’s content.
Agreement on the goal, dispute over the route
The KvK said it shares the concern about the high cost of living and the need to improve workers’ purchasing power. It supports the principle that a full-time worker must be able to live from their salary. What it disputes is that linking the wage to the bestaansminimum is the optimal route to that goal.
According to the figures Balkenstein presented, the minimum wage is currently about Afl. 2,007, while the subsistence minimum for a single person is about Afl. 2,670 — a difference of about Afl. 663, or one-third of the minimum wage. The linkage would touch 20,484 jobs, 43 percent of the private sector, and 55 percent of women working in the private sector, he said.
Small businesses and employment
Balkenstein warned that such a measure could have serious economic consequences, particularly for small businesses and employment, if the necessary research is not done first. The scale of the gap — a third of the current minimum wage — is central to the chamber’s concern about how employers, especially smaller ones, would absorb it.
An outdated measuring base
The director also questioned the basis on which the subsistence minimum is calculated. He noted that the minimum wage has risen 37.5 percent since 2000, against inflation of about 33 percent, while the bestaansminimum has risen much faster, driven by food and housing costs.
That subsistence figure rests on a 2006 CBS income-and-expenditure survey used for calculations in 2010. Balkenstein questioned taking a decision of this size on an information base that is 20 years old, and said nobody knows exactly how many families in Aruba live below the subsistence minimum.
The chamber’s intervention adds the business community’s voice to the debate over the government’s plan to gradually raise the minimum wage to the subsistence level — agreeing that purchasing power must improve, but arguing that the research, and a clearer picture of who is affected, must come before the wage is tied to the bestaansminimum.
Sources: NoticiaCla | Diario
