Increase Haiti's Minimum Wage

To:  United Nations Special Envoy William J. Clinton

We appreciate your efforts to raise Haiti’s profile and to bring together an ensemble of actors so that needed aid to Haiti can quickly materialize. As you know since you’ve been visiting Haiti, several human development indicators are critical, notably the spiraling costs of living which jeopardizes food security, basic health care, and education.

As you correctly point out, now is the time for action in Haiti. And despite Haiti’s challenges, there is real cause for hope that Haiti’s government and Haiti’s people – with the support of the international community – can meet these challenges.

As you are no doubt aware, one of the primary issues in Haiti is the proposal to raise Haiti’s minimum wage, from 70 goud ($1.75) to 200 goud ($200) per day. The day after your official investiture as U.N. Special Envoy, Haitian President René Gracia Préval officially announced his objection to the law that unanimously passed the Senate on May 5. In his letter, Préval asked that the doors to negotiation remain open. We believe that your support for the minimum wage increase would help facilitate good faith dialogue and hopefully, its passage.

First, this minimum wage hike is long overdue. Article 137 of Haiti’s Labor Code stipulates that the government make an adjustment every year in which inflation is greater than 10%. According to Haiti’s central bank (BRH), inflation was 42.03% in December 2003, 25.83% in January 2004, 19.79% in January 2005, 12.4% in September 2006, and 16.3% in March 2008. The minimum wage should have therefore been augmented each year since 2004.

Second, according to the government’s own information, the wage hike does not go far enough. According to a Minister of Social Affairs report based on a study of the rising costs of living, Haiti’s minimum wage should be at least 300 goud, not 200.

Third, Haiti is already the beneficiary of extremely advantageous trade conditions through HOPE-II. According to industry sources, HOPE forgives up to $1.50 per pair of pants in U.S. import duties. This is more than 10 times the cost of the wage increase. According to a study in Port-au-Prince factories, the average daily wage is 100 goud per day, with an average daily quota of 500 pants, or 20 Haitian cents per person per pant (half a U.S. cent). With an average of 25 people per “module” (production unit) that gives a total labor cost of 5 goud, or 12½ cents per pair of pants. A 200 goud minimum wage would double that, to 10 goud, or 25 cents per person, an increase of 12½ cents. Industry leaders threaten the closure of up to 15,000 jobs if the minimum wage increase was passed. The same group made the same threats in 1997 and in 2003, both times when Presidents Préval and Aristide raised the minimum wage. Both times, the impact of the wage increase was negligible (especially compared to the U.S./U.N. embargo and the 2005 WTO decision to lift quotas against Chinese textiles). Neighboring Dominican Republic JUST increased its minimum wage to 9 dollars a day.

Fourth, the problem is not just about the low wages but workers’ low purchasing power, in no small part because of the high cost of private, often accessible basic social services such as health care and education. You have underlined with your support of the Collier Report that Haiti’s subcontracting sector is the primary engine of growth in Haiti. However, as you pointed out in your June 16 remarks accepting your new position, Haiti’s government believes that it has multiple pressing priorities, not the least of which is ensuring that families affected by last year’s hurricanes have the means to rebuild. As development experience in Haiti shows, a multi-sectoral approach is needed. When elected governments, working with the local population, take the lead in defining policy and securing international support to solve human development issues like literacy or HIV/AIDS, they can be successful. The approach by Partners in Health / Zanmi Lasante which straightforwardly addresses problems has proven to work. We ask that you make human development your top priority, not just encouraging the development of subcontracting industry. But as you know, rebuilding a public health or an education sector that has long suffered under-investment takes time. HOPE-II offers a nine-year window of opportunity. Hopefully with the increased wages, and thus an increased tax base, workers and Haiti’s government will be able to invest more in social services during this time. In the mean time, it is unrealistic to expect that workers’ purchasing power will overnight grow because health care and education costs will suddenly be absorbed by the government.

For these reasons and others, we respectfully request that you encourage the minimum wage law’s passage and communicate these concerns to your colleagues in the United Nations and the private sector.

Sincerely,

The Undersigned

The Increase Haiti's Minimum Wage Petition to United Nations Special Envoy William J. Clinton was created by and written by Renée Bergan (info@potomitan.net).  This petition is hosted here at www.PetitionOnline.com as a public service. There is no endorsement of this petition, express or implied, by Artifice, Inc. or our sponsors. For technical support please use our simple Petition Help form.