Economics

Haitian Underwear Workers and Their Small Wages

|

the people of Haiti demand cozy cotton gifts

The Nation recently posted and then pulled a story about the politics behind an increase of the minimum wage in Haiti. (Looks like the premature posting was a snafu with their local partner publication for the story, Haiti Liberté.)

A couple of years back, the Haitian government decided that it would be an awesome idea to more than double the minimum wage to 61 cents an hour from 24 cents an hour. Many U.S. companies—including Hanes and Levi Strauss—have contacts with* factories in Haiti and were none-too-pleased about the proposed increase. Through the dark magic of lobbying Obama's State Department got involved and a partial exception was carved out for textile companies.

The Columbia Journalism Review excerpted this key passage from the Nation story:

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."

CJR reaches for the snark in response:

Well, hey. Imagine Haitians doing things for their "unemployed and underpaid masses" rather than rich Yankee corporations. The outrage! 

The folks at CJR also own calculators, and they were able to figure out that the cost of the proposed increase would come to less than one-sixth of the salary and bonus of Hanes' CEO. 

wait till we get our hanes on you

But the "economic reality" is that a massive increase in the minimum wage will screw the unemployed masses—making it more expensive to employ each person rarely means more people wind up employed—and won't do much for their underpaid brethren in the long term anyway. When it comes time for Hanes to decide whether to build that second (or third or fourth) factory in Haiti, the extra $12.5 million a year (by CJR's calculations) that the Haitian government tried to extract from their firm will be on the minds of the executives and shareholders.

The question is never whether a company can "afford" to increase worker salaries. The question is whether the world's skivvies- and dungarees-makers will choose to keep doing business in Haiti. That's something the Obama administration gets, even if CJR doesn't.

The piece will be back up on Wednesday, according The Nation's website.

Via Mark Lambert, who always tips well.

*Updated: The factories are contactors, not directly owned by Levi Strauss.

NEXT: Locked Up, Locked Out

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Let’s boycott Hanes and make a moral stand by putting all of those pathetic Haitians out of work…

  2. Why not raise the minimum wage to that of the average salary in Luxembourg ? lots of left wingers believe that the path to wealth is achieved by things like minimum wage, by raising the minimum wage to $30 000 surely there will be unprecedented prosperity erupting in Haiti.

    Somehow I doubt “The Nation” would support a doubling of its worker salaries if the government decreed it.

  3. There’s no Haitian Nancy Pelosi to exempt the Hanes plants in her district from the minimum wage increase?

  4. Isn’t standard libertarian theory that all minimum wages are bad? So why are you complaining?

    1. Do you have a point or are you just naturally an idiot?

      1. Can you ignore an illogical comment or do you feel the need to establish your superiority because you weren’t breast fed?

        1. Do you have a point or are you just naturally an idiot?

  5. The question is never whether a company can “afford” to increase worker salaries. The question is whether the world’s skivvies- and dungarees-makers will choose to keep doing business in Haiti. That’s something the Obama administration gets, even if CJR doesn’t.

    The Obama Administration doesn’t “get” anything. It’s just bowing to a different set of political pressures.

  6. There is more than just salary increases. The percentage of manufactured goods that need to be rejected is highest in Haiti among the Caribbean and Central American countries.

    Haitians are the least skilled in the area. Employers have to spend extra resources to teach them to read (most are illiterate), and train on the machines.

    It would be interesting to know the net profitability of a Haitian enterprise as compated to a factory in Jamaica or Costa Rica.

  7. They should get Weiner as a lobbyist. He is good at making large packages.

  8. God, Haiti is such a fucking basket case.

    It hurts my head just to think about it.

  9. Ahhhh but what is his position on Haitian employers providing health insurance?

    1. Irrelevant, since now all Haitians will be able to afford their own insurance.

  10. If companies keep doing business in Haiti after the minimum wage increase, and don’t take their business elsewhere, surely the raise will have been validated. I haven’t heard of anyone threatening to move yet.

    Of course corporations have a duty to serve their shareholders so the fact that they are upset isn’t really news.

    And if business doesn’t go elsehwere and the wage increase contributes to political stability/security? Who knows?

    Sorry what was I thinking… back to kneejerk fishbowl economics and bashing Obama for not being Reagan.

    1. Bzzt. There are significant costs associated with moving production elsewhere.

      A more likely scenario, as Ms M-W suggests, is that they just won’t open new factories in Haiti.

    2. Let us know when you graduate from college and actually run a business, mmmkay? Cause your comments indicate pretty clearly you haven’t.

      Have fun in the fishbowl, perfesser.

      1. Sorry maybe I should leave comments up to sarcastic motherfuckers like you

  11. I think it was foolish for Haiti to raise the minimum wage, but our State Department should not have gotten involved out of respect for Haiti’s sovereignty.

  12. The CJR is notorious for economic illiteracy.

  13. The question is whether the world’s skivvies- and dungarees-makers will choose to keep doing business in Haiti. That’s something the Obama administration gets, even if CJR doesn’t.

    Woah woah woah Katherine, lets not get ahead of ourselves. The Obama administration is just sucking lobbyist cock as usual. How about pointing out the hypocrisy of supposedly anti-lobbyist, champion of the working man, Hopey McChange instead of placing intelligence where it doesn’t exist?

    1. Hey guys I blacked out after my john donkey-punched me too hard. Did I write anything intelligent while I was out?

  14. “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.”

    That’s the point of minimum wage laws and all other progressive economic measures.

  15. I am sorry Katherine. I find the idea of Obama carving out an exception for textile industries more disgusting than the minimum wage law. At least the original minimum wage law did not pick winners and losers. Is the US going to be in the habit of forcing foreign nations through dark channels to subsidize favored industries? What did Obama get for being Hanes’ cabin boy?

    I really do find this more disgusting than the minimum wage law. It shows the terrible overreach of our government and the nauseating collusion between business men and politicians.

  16. I beays by dre,beays by dre believe that we are not real social workers.

  17. Greetings Now i’m for that reason happy I stubled onto any site,Nike Dunk High Prefer came across you will just by error, at the same time Document was first Nike Dunk 2008 Gold Black browsing relating to Bing just for something.

Please to post comments

Comments are closed.