In other news, the Obama administration seems to have pressured the Haitian government at the behest of contractors for American companies Levi Strauss and Haines to abandon a law they’d passed in 2009 to raise their minimum wage law from 24 to 61 cents an hour. Thanks to American intervention, it was raised instead to 31 cents.
Rufus F.
Rufus is a likeable curmudgeon. He has a PhD in History, sang for a decade in a punk band, and recently moved to NYC after nearly two decades in Canada. He wrote the book "The Paris Bureau" from Dio Press (2021).
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The Chinese government kind of has a point, doesn’t it?Report
Alternatively, Haiti has 40+% unemployment (and closer to 2/3 if you would use what we call the U-6 number). And a nominal GDP of between 600-700 dollars per capita, so 3 dollars a day would be actually above the average economic output per citizen.
And we don’t know what the cable actually said because all we got is the slanted Nation story* and everyone on the internet that picked up on it.** Because that whole project hasn’t been about transparent dissemination of government information for a while now.
* Haiti had one of the worst examples of actual no-kidding slavery in the Western Hemisphere, so I wouldn’t have been so casual throwing around the term ‘slave wages’
**nobody as far as I could see linked to an actual cable and a search for ‘haiti levi’ (no quotes) doesn’t come up with anything on the .org’s websiteReport
Yeah, I posted it in “Off the Cuff” without much in the way of commentary to see how people here responded. I’ve been getting it forwarded it to me by people who are less pro-Obama or pro-trade than the people here. Also, it’s not about a politician’s dick and I had already heard what everyone on earth thought about that.Report
This sounds like something only an evil Republican would do.Report
Haiti and the Dominican Republic share the same shithole island; one is less shitty than the other. The estimable gathering of minds here surely has an explanation and explication as it is weightily concerned with such things, colonialism, post-colonialism. This is not an area of my own study. Let ‘er rip. Edumicate us.Report
Haiti was almost completely isolated internationally between independence in the 1790s and American nearly-colonization in 1915. Although it previously had a wealthy plantation economy (based, obviously, on slavery), there was no-one to sell the products too and the economy regressed to subsistence farming. The Haitian state has ranged from non-existence through larceny to thuggery, both during isolation and now, so the Haitian people have developed a thoroughly non-transparent and self-reliant way of going about things in order to keep their dependence on their crummy government to a minimum. Unfortunately subsistence agriculture, autarky and arcane social institutions are not a recipe for economic growth. They are a recipe for soil depletion, deforestation and the persistent failure to establish a state whose writ runs beyond the large towns.
The Dominican Republic has had a much more conventional colonial and post-colonial history. Plantation economy, independence, military dictatorship, and so on, so there’s never been the giant step backwards into self-sufficiency and resistances that Haiti experienced and is still recovering from.Report
I seem to recall reading somewhere that former French colonies have some of the worst post-colonial records. The Spanish better, and the English better still. Is there any truth to it? And if so, why?Report
France didn’t have any large colonies settled by Frenchmen, once they lost Quebec and Louisiana. That sort of skews things, since the USA and the dominions obviously massively skew things towards the English, and South America helps the Spanish a lot. It seems fairly clear that colonies directly settled by Europeans will be better adjusted to becoming European style nation states that countries with different cultures where Europeans showed up and started bossing people around.Report
Which now I think about it basically means the French colonial record was messed up by the run-up to the revolution and its aftermath.Report
The Brits didn’t settle anywheres either, ‘ceptin’ N.America, its Anglo-Irish prison colony of Oz, and whatever you want to call NZ.
A Spanish friend of mine rightly noted that the Spanish didn’t either, but wherever they conquered, they made it Spanish.
There’s a necessary distinction between colonizing as settling and colonizing as taking over the place and administrating/exploiting/bossing the hell out of it.
As for why the ex-Brit colonies, even the bossed/exploited ones, have done better than the rest, there are theories about that.Report
Tom, I was thinking of the exploited places moreso than the US, that’s part of what I was thinking of. I’m not saying India is the cat’s meow, but it does seem better off than a lot of other places. Especially considering a lot of what it’s up against.
(I have to confess here. I’m an ugly American, somewhat ignorant of the rest of the world. So if someone says it’s due entirely to other factors OBVIOUSLY, and can explain what everybody knows that I don’t, I am duly chastened, but happy to learn.)Report
Mr. T, India pleasantly surprises me as well. There are so few pleasant surprises in this world.Report
Tom, my erstwhile friend, getting tossed under the bus by YOU of all people, clearly spells the inevitable doom that was always awaiting me. Or as you would say, I am an unsalvageable wreck that can’t die soon enough! I laughed so hard with that one.
Where has Maniac Bob gone? I’m sensing an odd, deep withdrawal from humanity.
I guess our beers and pizza and music will have to wait.
Take care of yourself my friend. My best wishes for you, always…H
Oh well, fates frequently have the oddest endings.Report
Yeah India is interesting. I’m not sure, outside of India and the dominions, that England’s colonial record is better. I mean – Burma? Nigeria? Zimbabwe? It doesn’t look that great, does it? It’d be interesting check average HDI for each of the old colonial power’s colonies. Not sure which way it would actually go.Report
I ssuppose India woul be great compared to Haiti, but since I’m currently in India (for my brother’s wedding) I can tell you that they have tons of governance problems which I have little idea how to solve. If you want more positive examples of british colonisation, look at the rest of British Malaya, Singapore, Borneo etcReport
Yeah – they say our governance was better and we invested more. I’m not completely convinced. When you look at British and French colonies that are culturally similar and had similar patterns of colonization, they still look quite similar. Myanmar versus Cambodia – I mean, probably a slight win for the French there. Fiji versus Tahiti – eh, probably the French again. Pondicherry doesn’t look very different from the rest of India. Nigeria versus Cote d’Ivoire – okay, we probably win that one.
In the end, the British empire has a different legacy from the other European colonial empires because it was in fact very different in its pattern of settlement and above all else in what we actually colonised. India is the stand-out case that should by rights look like any other basket-case post-colonial country but by some miracle doesn’t quite. Just look at Pakistand and Bangladesh and see how wrong India could have gone. But aside from that, I think people tend to think too much about Singapore and Hong Kong (which the British did basically settle – just not with British people), and the Dominions and too little about Nigeria and Sudan.Report
Could Gandhi be the reason India is doing better than most other ex- colonized countries?Report
Being half-Irish, it’s hard to utter these words but—okay, ughhh, uhmmm, aargh, okay, dammit, it has been said that the Brits never left a country less civilized that when they entered.
Phew. Painful. Just don’t ask me to offer words of praise for Cromwell—the gallows would be much more desirable.Report
I don’t think so, Dexter.
The Indians from India are simply more intelligent. In every measurable aspect and their brains just gobble up math with gusto and love.Report
Simon, I was thinking that settlement patterns probably contributed (though see my comment below). The Brits inhabited (or actively governed), the Spanish procreated with, and the French (from what I understand – see my comment below) kind of neglected.Report
“France didn’t have any large colonies settled by Frenchmen, once they lost Quebec and Louisiana. ”
Would Algeria count?Report
Oh, yes, Good point. Obviously didn’t work out that well, but its definitely a counterexample to my theory.Report
I suppose the French never succeeded in convincing the Algerians that they were French. Much the same problem the British and Irish had, really.Report
Then the Haitian people should probably be thanking Levi Strauss and Haines. Nearly half of Haiti’s population has no formal job. Having a minimum wage greater than the current average wage isn’t going to improve that.Report
Well, fair enough. But can you think of any time or place in world history in which a large group of workers wanted to be paid more than they were and the argument was not made that they should be thankful just to have a job?Report
Every time. And its an irritating argument precisely because its both lacking in empathy and a bare value judgement and therefore manages to be both callous and unenlightening at the same time. Oddly, that’s not *quite* where I was going …
Its a question of where the wealth to pay everyone in Haiti 61c per hour is going to come from. Haiti doesn’t produce 61c per hour worth of stuff per person. Their GDP per head is approximately 39c per hour. Which is appalling. But obviously changing the law about wages will not change that. Instead it will simply force employers that need to obey the law – foreigners, large businesses, people without political connections – reduce the number of people they employ. And since the marginal product of the average Haitian worker is going to be less than 39c per hour, they’ll have to reduce it a long way in order to pay the remainder 61c per hour.
Of course, the true average GDP per head in Haiti is probably quite a bit more than 39c per hour, since a great many people work in the informal economy or in subsistence agriculture, which aren’t measured. So raising the minimum wage might not reduce average welfare. It might just force everyone into the informal economy and retard economic growth. Probably not what the government is aiming to do, though.Report
Okay, I get where you’re going with this, but does GDP tell us any estimate of what amount the workers in those particular factories will produce per hour? It seems like it would depend on the particular industry, right?Report
Rufus is correct: it’s a factory for white T-shirts, the bottom of the textile totem pole, which can be set up anywhere in the world for mebbe $55K and staffed by semi-skilled labor.
Good article here
http://www.npr.org/blogs/money/2011/06/10/137064161/would-a-5-a-day-minimum-wage-make-life-better-in-haiti
Over in the Dominican, better-skilled labor makes higher quality and more profitable shirts. Workers are able to demand and get better wages.Report
Absolutely. I’m sure the workers in Levi Strauss factories have a marginal product higher than the average Haitian, and the government could impose a higher minimum wage for those employees without necessarily causing any bit problems except deterring those firms from employing Haitians.
I’m more interested in the rest of the economy really. In growth and development terms these export oriented enterprise zones are mostly an epiphenomenon. In themselves they don’t contribute anything to capital formation. The most they contribute is maybe to incidentally provide a little seed capital for small businesses.Report
There’s an important part of the cables that has been left out of the linked story: “ADIH and USAID funded studies on the impact of near tripling of the minimum wage on the textile sector found that an HTG 200 Haitian gourde minimum wage would make the sector economically unviable and consequently force factories to shut down.”
The idea of a 31c/hr minimum wage made me stop cold, but the argument that this was done to help the manufacturers is completely unsupported in the cables themselves.Report
Ah okay. So then you should please link to the cables you’re talking about because I’m digging through this site http://wikileaks.ch/reldate/2011-06-01_0.html
and not sure I’m finding the relevant cables.Report
The quote came from the Haiti Liberte article but after reading through a few of the cables my original comment is clearly wrong.
This cable details the ADIH study. The ADIH is basically a large industry lobby group, and “USAID funded” actually seems to mean funded by factory owners who receive some free-trade benefits . The study itself is described as a series of interviews of these factory owners asking them how they would react to a wage increase – with the response, of course, being “Despair!”.
This cable is the source of the original quote, now taking the study more-or-less as gospel and describing the internal politics of modifying the law to a phase in for textiles, which the industry seems satisfied with. Finally, this cable has the damning “unemployed and underpaid masses” quote though the cable itself is a cheeky summary of the improving political situation in Haiti with a short warning about populist tactics.
One thing that is noticeably absent, both from the cables I read and from the HL article is specific evidence of actual pressure by the US government on Preval. It’s clear that the US ambassador supports the findings of the industry lobbyists, but does not seem to be directly involved in the negotiations and frequently states that the details are unknown. I don’t know what the solution is for a country with 80% unemployment, but the State Department is clearly giving industry the benefit of the doubt over the people.Report
But historically the United States has always been Haiti’s greatest friend!Report
I think it is beyond any doubt that conditions in Haiti were were immeasurably better when occupied by the Europeans. It was the wealthiest, most educated, and prosperous country in the Western Hemisphere.
And you’re talking produce (fruit, vegetables, peanuts, sugar cane) like no other country in the world.Report
Wait, what time period do you have in mind here? Back when it was Saint Domingue? Or when the US occupied from 1915 to 1934? Or some other time entirely? It’s certainly been profitable in terms of what it exports, but it’s hard to think of any time that it was the “most educated” country in the Western Hemisphere.Report
I happen to work in Sourcing for a company that is staring to buying Haitian-made apparel. I know well and do business with one of the companies that is building factories in Haiti.
I am not super up-to-date on world minimum wages and my unit does not work with Haiti, but I can provide a fair amount of context here.
Most important is to put those wages in context. $.31/hr. is approximately $60/month, that puts them at almost 50% higher than the Bangladesh minimum (which also almost tripled recently), and I think on par with Indonesia. Comparing to the US is meaningless as we have nearly no apparel manufacturing left.
With a fairly undeveloped industry that’s going to require importing a lot of materials from the US or other nearby countries that are rather expensive, getting companies to invest in Haiti is a very difficult proposition. I knew a guy who lost tens of millions of dollars opening a factory in Namibia.
It’s also important to know that apparel factories in most countries rarely pay the minimum wage to many of their workers. The minimum wage will usually be paid to workers in training, they they’ll get paid 20-40% more as their skills develop.Report
Thanks Plinko. Encouraging news regarding Haiti is always, always welcome.
You’re doing God’s work, my friend. Bless you! Such suffering that country has had to endure. I remember seeing a program a year or so ago, showing that people literally were eating dirt for sustenance.
All the best, my friend. And the very best of luck.Report
Forgive the idiocy, but did your nickname come from that game show?Report
More or less, it’s really just an old joke that has stuck for a long time.
Let me say, what I do is not God’s work unless you give praise for cute and fairly inexpensive kids clothes. I am glad if it indirectly helps people out of poverty (and I think it absolutely does), but I don’t have any illusions that my job is even above-average in terms of making the world a better place.Report
Okay, so this is very helpful. Thanks for the insight. Now, if the workers would only get the minimum wage during training, why is it so important to keep it down?Report
Well, let’s say that the minimum is $.60/hr. instead, that means the more experienced workers need to earn at least $0.80, otherwise what’s the incentive to stick around and get good at the job? At that rate, they’re earning more than workers in a host of countries with much better infrastructure, better access to materials and higher productivity. At that rate, it’s likely few would bother to open factories, especially given Haiti seems very high risk of total loss from a disaster or government instability.
If I’m buying clothes from Haiti, I need to consider whether or not I’m better off in Guatemala, El Salvador or Dominican Republic, or Vietnam, Bangladesh or Indonesia. If Haiti is as expensive or more, why do business there at all?Report
Rufus, if you are going to artificially set wages, why stop at the minimum–why not set the minimum wage at $50?
The effect of ruining small businesses can be obtained much easier and quicker when you arbritally tell them what their “living wage” should be. Just ask Harvard—they attempted to do precisely what you are advocating and within a matter of a few weeks the whole system ground to a halt, the “living wage” ended up being around $5-6 bucks an hour—not surprisingly all of my e-mails have just disappeared. Later, my friend.Report
No, I am not advocating anything here about a living wage. What I’m doing is asking to what extent the US can get involved in a sovereign friendly nation’s legislative decision making before it becomes meddling and coercion, and really if we even care anymore. Even if these factories were going to leave due to the higher minimum wage, which I totally accept as highly likely, why is it the perogative of the US to get involved in pressuring Haiti to change their legislation? And, incidentally, I’m asking because I don’t have the answer either.
And, if by your emails, you mean your comments here- no, they have not all disappeared. This comment, and all the other ones in which you’re bringing up points on the topic at hand, are still here. I removed the comments in which you interrupted the threads here to talk about your thoughts on Stephen Hawking’s atheism and to butt into the conversation I was having with Simon K and quiz us on our knowledge of Canadian war heroes. I still find that sort of thing mildy amusing but mostly just rude, like I told you last week.Report
This was my initial response. Or the source of my discomfort. Maybe they should be grateful for our “guidance”, and maybe our advice is sound, but I am a little bit uncomfortable with the dynamic here. At the same time, Haiti’s track record for self-governance is not particularly good.Report
Well, the charitable view here would be that the companies in question and the State Dept actually want factories to be opened in Haiti and want people to get those jobs. So, sensing that the proposed wage levels would scare away the capital investment from factory owners, they piped up to the Haitian government that the full wage hike would be counter-productive.Report
“Sovereignty? What’s that?”Report
Right, that was my issue here. I get that Haiti voted in a bill that was likely to drive out factories and fish up their economy even worse; and I wasn’t trying to say otherwise. But at what point does this go from the US trying to help a friend for their own good to just interfering in the lawmaking in a sovereign nation?Report
I think to know that we’d need to know what ‘put pressure on’ meant. Diplomats ‘put pressure’ on officials in other countries all the time, I don’t see how it’s remarkable unless we’re talking extortion type intervention (which I wouldn’t rule out).Report
Yeah, and that’s a really important question and I definitely don’t think the Nation has the answer to it; at least, not yet. But I posted this when we were all talking about the Congressman’s wang, and I can pretty guarantee that the press will absolutely clarify for us at exactly what he did with his penis, when, and who else was involved. The full story here? I’m not so confident.Report