Some of the lowest income groups in the country got a bit of positive pre-Christmas tidings these days. Both the minimum wage and AOV old age pension are going up.
In the former case it’s from NAf. 10.40 to NAf. 10.86 per hour, an increase of 46 guilder cents. This translates to NAf. 3.68 per eight-hour day, NAf. 18.40 per 40-hour week or NAf. 80.96 based on an average 22 eight-hour days per month.
The good news is that the hike is taking place per January 1, 2025. The lowest legal salary’s present level was set in April of this year.
St. Maarten’s full AOV is being raised from NAf, 1,328 to NAf. 1,398 monthly, a difference of NAf. 60. Seniors should also receive the usual holiday bonus of a so-called 13th month.
It’s well-known that these amounts cannot be considered even close to liveable wages, especially considering local prices for consumer goods but also utilities and relatively high housing expenses including rent.
The local tourism economy has developed quickly and strongly, but growth in social terms largely stayed behind. That backlog cannot be eliminated from one day to the next.
Current costs to travel to- and vacation on the island are partly based on what workers get paid here. When these rise abruptly it can affect the destination’s competitive edge, seeing the many “sun, sand and sea” alternatives available in just the region.
Minister of Finance Mariska Gumbs says the – yet to be adopted – Tourist Tax will become an important revenue generator for government. In her opinion, inhabitants alone cannot continue to carry much of the collective burden of public facilities and services with so many visitors benefiting from them.
However, keep in mind that guests already pay airport- or harbour fees and in many cases room tax. Turnover tax is levied on businesses and passed on to all clients making purchases as well.
If the rate of this new tax is modest enough, potential damage may be limited, but fiscal authorities should continue unabated efforts to go after short-term accommodations rental whether by locals or non-residents too. In addition to extra money flowing into the national coffers, that can also help create a more level playing-field for hotels and resorts – directly or indirectly – providing the livelihood for lots of people within the dominant hospitality industry.
