The Aruba Hotel & Tourism Association has reviewed the recently published Economic Policy for 2019-2022 of the Aruba government, and wishes to clarify employment salary information included in the document.
On Page 26 of the “A Strong and Resilient Economy” policy, it is stated that according to 2010 census data there is a high percentage of workers in the hotel and restaurant sector that grosses a low (minimum wage) income and considered a “vulnerable” group.
AHATA has completed a manpower study of 22 hotel and timeshare members, which directly employ a total of 7,560 residents of Aruba, and can report that only 3% of their employees are earning minimum wage. It is important to add that a vast majority of workers in the tourism industry that earn below AFL 2000 (i.e. Housekeeping, Food and Beverage, tour guides, etc.) also earn significant untaxed tips, and therefore their total income is beyond what is reported to the local tax office. The additional and unreported income generates significant economic activity through the consumer purchasing power it enables.
Over the years, we have observed statements made by a variety of leaders in the community that is misleading regarding the tourism sector’s wages. We consider this misleading information to be of great detriment to the tourism industry and the local economy, as it can deter the local population from applying for jobs in the pillar of our island’s economy.
Companies within the sector already report great challenges in finding qualified candidates for the various positions available, and AHATA urges local leaders to consider the full reality of data prior to distributing incomplete information. AHATA applauds the efforts to diversify Aruba’s economy and educational focus, however it is important that the primary industry can count on a robust workforce to ensure sustained success.
Meanwhile, AHATA was encouraged to note that the Economic Policy includes the identification of lack of flexibility in the labor market regulations as a bottleneck for doing business and productivity levels, while recommending reform of labor laws (Annex E).
AHATA endorses a review of the regulation that can impede Aruba’s ability to reach a more effective productivity level. In IMF’s recent report on Aruba, they illustrated that “the labor market regulation is rigid, impeding labor mobility and job growth”. The IMF recommends that policy should promote labor market flexibility and provide protection for workers (via unemployment insurance) rather than jobs, hereby supporting a productive private sector to stimulate our economy.