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#1767: Minimum Wages in Haiti (electronics) Durban responds

From: Lance Durban <lpdurban@yahoo.com>

                          PAP, 01/08/00

In response to the recent request from Nina Glick Schiller
for minimum wage data...

In pre-1986 Haiti the Haitian minimum wage in our sector
(electronics) was 15.60 gourdes per (8 hour) day.  At 5
gdes per US$1, the daily minimum wage was US$3.12.   By
Duvalier's departure that year, there was already a black
market rate (maybe 10%) on the dollar, meaning that the
effective wage expressed in dollars was a bit under that.

Upon the election of President Aristide the rate was raised
to 36 gourdes per 8 hour day, and there has been no change
since then.  Whether this was done legislatively, or simply
by decree I am really not sure, but with the current
exchange rate of 18.25 gourdes per US$, the minimum wage in
Haiti when expressed in U.S. dollars has actually declined
to just under US$ 2.00 per day.  Keep in mind that all
Haitian companies have to pay an annual bonus (a 13th
month) every year, which is NOT included in these minimum
wage figures. 

It would be interesting to compare the above data with the
inflation rate (in gourdes) over the past 20 years, but
that I do not have.  Does such data exist?

List members should be aware that most Haitian factories of
any reasonable size pay MORE than the minimum wage, in the
hope of attracting and keeping the very best workers.  In
our plant, our Haitian sub-contractor pays our employees a
base salary of 40 gourdes per day, but we have an incentive
system that increases that substantially for most (but not
all) workers.  All employees must be at least 18 years of
age and be able to fill in an employment application which
is in French.  Why French, you ask?  Because there are
enough candidates for every single opening so that we can
afford to be very picky.  We prefer that our sub-contractor
hires young people who have struggled to get themselves
educated to make themselves more employable.  We feel that
this is a good indication of some personal initiative.

Manutech is an open-books, profit-sharing U.S. corporation
with no employees physically in the U.S.  Our Haitian
sub-contractor's employees typically receive a special
profit-sharing bonus in March and September.  We also have
a school loan program whereby employees can borrow money
each September to put their children in school.  They must
then repay us 150% of the loan over the next 12 months,
with the extra 50% going into a special in-house savings
account in their name.  The following September, they can
either take another similar type loan, OR close out their
in-house savings account by means of one big withdrawal. 
Can't do both.  The intent and effect is to help employees
finance the education of their children.

Finally, I would point out that the electronics sector in
Haiti has shrunk considerably in recent years.  Most of our
U.S. customers have moved their own manufacturing
operations to the the Far East in recent years, and we have
had considerable difficulty competing with their local (Far
East) sources.  Any potential investor in manufacturing in
Haiti looks for 4 things, and in order of importance they
 1. Political Stability (democracy helps)
 2. Infrastructure (communication, electricity, ease of
        entry at customs, etc.)
 3. Work Ethic/Education (Employees who want to work
        and have a minimum basic education)
 4. Low labor costs 

Considering that our direct labor costs in Haiti are but
15% of our total costs and given the plethora of low labor
options in the world, I can tell you that item 4 is really
not a big determinant.  If I were 25 years younger and
starting a labor-intensive manufacturing plant today, I
would probably learn Spanish and move to Honduras, an
impressive country that seems to know where it is going. 

Lance Durban

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