There is an ongoing debate in Curaçao about a minimum wage hike. The former government had approved one, at which point business association VBC took legal steps to try to stop it, also in light of objections by the Advisory Council.
Under pressure of the labour unions that court case was later withdrawn. They then warned the incoming PAR/MAN/PIN coalition not to delay the increase.
The Rhuggenaath Cabinet nevertheless intends to set a responsible multi-annual policy on the issue, taking all interests into account. That may not be what the workers involved and their representatives want to hear, but makes sense.
In St. Maarten too it’s pretty much a no-brainer that the current minimum wage, just like the AOV old age pension, is simply not enough to cover the cost of living. However, acknowledging this reality and doing something useful about it are two different things.
In an open economy just about any collective pay raise will be reflected in higher bills for consumer goods. The only way to totally prevent that is with a complete mandatory price freeze, a rather drastic intervention in the free market.
Besides, the question is whether Government would even be able to enforce such. There currently exists a basket of basic commodities for which maximum prices are set, but it’s not clear how effective the control on this is.
Relying on competition to keep prices down is probably the most realistic scenario. Sharing the island with another country can be helpful in that regard, as experience has shown that people will cross the border for cheaper food or fuel.
There is another aspect that can’t be overlooked: St. Maarten/St. Martin and its one-pillar tourism economy must compete with other destinations where salaries and the cost of doing business are often already lower. A substantial inflationary cycle might to a certain extent price “The Friendly Island” out of the market, with all possible consequences for the livelihood of practically the entire population that depends on income generated from visitors.
Nobody said governing was easy.
