WILLEMSTAD - Raising the minimum wage is a positive step, but by itself it is insufficient to effectively combat poverty in Curaçao. That is the key message from the Sociaal-Economische Raad (SER), which recently issued its advisory opinion on the indexation of the minimum wage for 2026.
The SER acknowledges that the planned increase will contribute to poverty reduction, but warns that a broader and more integrated policy approach is needed. According to the council, Curaçao’s large informal economy means that significant groups living in poverty are not reached, or are only marginally affected, by adjustments to the statutory minimum wage.
The minimum wage will rise in 2026 from 11.72 to 11.93 guilders gross per hour, equivalent to 2,066.28 guilders per month. While the SER views this increase as a step in the right direction, it stresses that informal workers, self-employed individuals, part-time workers, and benefit recipients often do not benefit directly from such measures.
A major concern raised in the advisory opinion is the lack of up-to-date data on the labor market. The most recent estimate dates back to 2017, when the informal economy was believed to account for approximately 40 percent of Curaçao’s workforce. According to the SER, this makes it difficult to accurately assess how minimum wage policies affect income distribution and poverty levels.
The council also cautions that excessive increases in the statutory minimum wage could have unintended and even counterproductive effects. A sharp rise in labor costs, the SER warns, may lead to reduced employment, increased reliance on social benefits, or a further shift toward informal work. In addition, higher wages can drive up the prices of essential goods, potentially worsening poverty for groups that do not benefit from wage increases.
The SER further notes that minimum wage increases often have a ripple effect throughout the broader wage structure, a phenomenon known as the spillover effect. Employers may raise wages above the minimum in order to maintain pay differentials between functions and safeguard motivation and productivity. While this can have positive effects, the council stresses that for Curaçao the overall impact on income equality remains difficult to assess due to the lack of recent and reliable statistics.
For poverty reduction to be effective and sustainable, the SER argues that minimum wage increases must be accompanied by coherent and comprehensive supporting policies. These should focus on increasing participation in the formal labor market, encouraging the formalization of informal work or providing informal workers with access to social protection, offering targeted income support to households with low or unstable incomes, and strengthening the statistical system to enable consistent monitoring and evaluation of poverty and income distribution.
According to the SER, only by combining wage policy with broader socio-economic measures can Curaçao make meaningful progress in reducing poverty and improving income equality.