May 19th, 2009
By Wadner Pierre-www.haitianalysis.com
Haitian labor activists applauded the Preval administration's decision to raise the minimum wage in Haiti from 70 to 200 gourdes ($5.50 USD) per day. However, the increase has been strongly opposed by Haitian industrialists. Georges Sassine, president of ADIH (an association of Haitian industrialists) warned that the wage increase would cost tens of thousands of jobs. He claimed that similar minimum wage increases in Cambodia have proven disastrous.
HaitiAnalysis asked Jose Cordero, an economist with Center for Economic and Policy Research (CEPR), to respond to the arguments that Georges Sassine and other businessmen have made against the increase. Cordero said ”In the case of Cambodia, I am not sure what disaster they are talking about, but I know that between 2004 and 2007 the country grew at about 11% per year. When inflation rose in 2008, and real wages declined, many factory workers left their jobs to go back to the country or to other informal activities which provide them more revenue than their work at a factory."
Cordero also pointed out that "Workers (especially those making only the minimum wage) have a higher propensity to consume than higher paid workers or company owners. They also have a lower propensity to import. These mean that a higher wage will likely increase aggregate spending, which could stimulate local production, and employment."
Georges Sassine was quoted by the Canadian online journal, the tyee.com, as saying, "Do we want 100,000 jobs paying 200 gourdes (US$5) or 200,000 jobs at 100gourdes (US$2.50)? What's better? 200,000 people working if I were a politician"
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