Posted by AFP/Hougansydney.com on Tuesday, May 24, 2016 Under: Economy
Port-au-Prince: Haiti raised the minimum wage by 25 percent on Tuesday, raising it from the equivalent of $3.87 a day to $4.84 to offset surging inflation.
Acting president Jocelerme Privert ordered the raise after labor unions last month demanded a hike to 500 gourdes, or $8.05, a day.
"In setting the minimum wage, the state has a duty to take into account sectoral realities and dynamics," said an official statement.
Already weak, Haiti's economy has slowed further because of a political crisis resulting from indefinite delays in the second round of presidential elections, which initially was scheduled for December 2015.
Haiti's annual inflation rate surpassed 15 percent in April.
Haiti's national currency, the gourde, has fallen in value over the past year from 47 to the US dollar in May 2015 to its current rate of 62-to-one.
In June 2009, the Haitian Parliament unanimously passed a law requiring that the minimum wage be raised to $0.61 an hour, or $5 a day. This pay raise was staunchly opposed by foreign manufacturers who had set up shop in the country, and the United States Department of State and the U.S. Agency for International Development backed those manufacturers. After Haiti's government mandated the raise, the United States aggressively (and successfully) pushed Haiti's president to lower the minimum wage for garment workers to what factory owners were willing to pay: the equivalent of about $0.31 an hour (or $2.50 per eight-hour day).
In 2011, WikiLeaks released a set of previously-secret diplomatic cables showed how strongly the United States Department had opposed the minimum wage hike:
To resolve the impasse between the factory owners and Parliament, the State Department urged quick intervention by then Haitian President René Préval.
“A more visible and active engagement by Préval may be critical to resolving the issue of the minimum wage and its protest ‘spin-off’—or risk the political environment spiraling out of control,” argued US Ambassador Janet Sanderson in a June 10, 2009, cable back to Washington.
Two months later Préval negotiated a deal with Parliament to create a two-tiered minimum wage increase—one for the textile industry at about $3 per day and one for all other industrial and commercial sectors at about $5 per day.
Still the US Embassy wasn't pleased. A deputy chief of mission, David E. Lindwall, said the $5 per day minimum “did not take economic reality into account” but was a populist measure aimed at appealing to “the unemployed and underpaid masses.”
In : Economy