Waging a wage war

A few years ago when I worked as a server in a steakhouse, in between our banter about rude customers and weekend parties, all of the servers would at some point chastise the low hourly wage we were paid ($2.85) and remark on our heavy reliance on tips from customers. Even on slow nights, however, we usually came out of there with decent money that bumped us up to at least the regular minimum wage of around $6/hour. At the end of the day, I was never in the same situation as most of the other servers. I was just a college student looking for a little extra cash and a fun job after classes. Many of the other employees were single moms trying to raise young kids or Mexican immigrants struggling for a better life. They actually depended on those wages to make ends meet, to put food on the table. It’s amazing how little $6 an hour can get you in America. After food, transportation, rent, schooling, clothes, and our outlandishly over-priced healthcare system (especially for those whose work doesn’t provide insurance), most of those employees were left with a few nickels and dimes.

Now, switch to Haiti. By no means is the cost of living for the average Haitian as high as it is for the average American (unless the average Haitian tried to live the lifestyle of a typical American with imported cars, big houses, and material extras). Nevertheless, the cost of living here is still quite high. Being a small island nation, many of the consumable goods must be imported from places as diverse as the Dominican Republic, Brazil, and Turkey. This adds transportation and tariff costs to the prices Haitians pay for food and other daily needs. Thus, many survive by eating non-imported goods like mangos, avocados, pineapple, plantains, bananas, etc. Yet still Haitian staples like rice, corn, etc. must flow in from international locations and often fluctuate greatly in price thanks to the world markets.

With this in mind, imagine trying to survive not on $6 an hour, not even on $6 a day—but on $1.75 per day. That’s right, $1.75 per day. Until last week, that was the Haitian minimum wage. If you study development or if you stay up late enough to watch the World Vision segments about starving Africans, you’ve no doubt heard that one of the international standards of poverty is the $2 per day line. Those who make less than $2 a day are considered impoverished. It’s hard for me to believe that a country could literally set its minimum wage below the international poverty standard—but Haiti managed to.

As I talked about in some of my earlier posts, the violent demonstrations that we see here in Port-au-Prince have been largely the result of this low wage. Progressive students from the State University of Port-au-Prince have marched through the streets demanding an increase to this insult of a daily wage. On May 5th, the Haitian Senate voted to up the wage from 70 gouds a day ($1.75) to 200 gouds a day ($5.00), but President Preval refused to sign the bill into law. Despite overwhelming support for the bill from the people of Haiti, the president was instead loyal to a small core group of textile businessmen that argued an increased wage would force them to pull out of Haiti. Many reports say it was a few as 8 key textile companies that were inhibiting the passage of the law.

The manifestations began the day after I arrived and still have continued occasionally up through last weekend when over 2,000 people gathered outside the Parliament to shout for change. Haitian police and UN troops regularly dispel the protests with teargas and rubber bullets, often just inflaming the Haitians’ hatred for the United Nation’s presence here. The protesters respond by throwing rocks and burning cars (like the UN truck flipped upside down and torched outside of Fonkoze a few months ago). People are fed up. They can’t survive. 80% of Haiti lives in poverty.

Finally, this last weekend the Senate reconvened and responded to the demands of the people, voting to raise the daily wage to $3.75. It’s hardly a livable income, but better than not having raised it all at all. We’ll see if it quiets the protestors in the streets. More importantly we’ll see if it quiets the rumbling bellies and cringing cries of poverty. My guess the answer to both of these questions is “no” because even after the good news of the Senate’s vote, a few issues still remain with wages…

1. The daily minimum wage law only affects about 250,000 out of the 10 million people living in Haiti. The overwhelming majority of people sell small items on the streets rather than work for more formal sectors which the government can regulate. These people undoubtedly make less than the government minimum wage. What can be done to either increase their profits or, more likely, to provide more formal, sustainable jobs for them?
2. The UN and Bill Clinton (Special Envoy of the UN to Haiti) recently released a report that said that Haiti’s comparative advantage was in clothing factories. They argued that low wages, along with no tariffs to export textiles to the US, were important to bringing jobs to Haiti. Thus, they effectively opposed the higher wage the people were demanding. Sounds to me like they are joining groups like the World Bank who impose structural adjustment policies on countries like Haiti which in effect can hurt the people and undermine democracy. Similarly, it raises the question of whether the policies like those of Clinton and the UN create a ‘race to the bottom’ where developing countries must continually lower their wages and labor laws in order to attract international business.
3. Along the same lines, will these key textile companies be true to their threats and pull out of Haiti? I saw it when I was in Namibia with a company called Ramatex. After a number of years of giving into the demands of the multinational company, the Namibian government finally refused to allow the company to continue polluting the local water, paying horrible wages, and prohibiting labor unions. Within less than 2 weeks, the company had moved their textile factories to a place with cheaper labor and lax regulations. It’s a tough question to answer: Do we encourage this type of foreign investment even though the companies are clearly taking advantage of impoverished people? Or do we tell these companies to get lost and risk losing a precious opportunity to at least put a few people to work?
4. Wages are just one gear to fix in the logjammed clockwork of poverty. Higher wages can do their part, but how effective can they be when you have a poor education system, little access to healthcare, poor infrastructure, etc.

These are a few of the questions that are playing out in my head now. It will be interesting to see how things unfold in the coming weeks here in Haiti. The unfortunate thing is that while I am merely pondering these questions, thousands of people are out there living the reality of it all. They are the ones who get thrown around between the latest government regulations, the handouts of international aid groups, the projects of thousands of NGOs, and the daily grind of life without a safety net. While the UN troops may be the ones with the tanks and guns, it’s the Haitians that are truly on the frontlines.