Edition Electronique

Vol. 8, No. 28
Du  Jan  21  au  Jan 27. 2015

Kòrdinasyon Desalin: Conférence de presse

Martelly government betting on sweatshops:
Haiti: “Open for Business”

The first of three articles

 “Haiti is open for business.”

 That’s what President Michel “Sweet Micky” Martelly said on Nov. 28 at a ceremony inaugurating a giant industrial zone being built in Haiti’s north.

 Across Haiti and abroad, Martelly, his government, and “advisors” like former President Bill Clinton have been pushing Haiti as a foreign investor’s dream come true.

 “We are ready for new ideas and new businesses, and are creating the conditions necessary for Haiti to become a natural and attractive destination for foreign investment,” the new president said this fall in New York City.

“The window of opportunity is now,” an aide added. “Haiti has a new President and a new way of thinking about foreign investments and job creation.”

The president might be new, and there might be new actors on the scene, but there’s not much new about the plans. Once again, Haiti’s government and her private sector – and their international supervisors – are pitching sweatshop level salaries as a key “comparative advantage.”

Assembly factories and free trade zones have been part of Haiti’s “development” planning for decades. Now, armed with billions of dollars in grants, loans and private investment, Haitian and foreign governments and business people are building a whole slew of new factory zones as part of the country’s “reconstruction.”

Worse, they’ve chosen a piece of fertile farmland for the showcase project: a giant industrial park, heavily financed by US$124 million in US taxpayer dollars. Six months from now, South Korean textile giant Sae-A Trading will be opening its doors. Its plants will use as its waste waterway a river that runs into the nearby fragile Caracol Bay. In addition to running the risk of harming the country’s already devastated environment, the new mega-factory will stitch millions of garments for Wal-Mart, Target, GAP and other US retailers, meaning that more U.S. workers will likely be knocked out of their jobs.

Not one major media outlet – in Haiti or abroad – has explored these and other factors of what some have touted as a “win-win opportunity” for foreign investors and the Haitian people. Indeed, many journalists have been cheerleaders.

But the “new” Haiti has definite winners and losers.

Haiti Grassroots Watch spent months on an investigation, conducting over three dozen interviews, visiting factory zones and workers in the north and in the capital, and reviewing dozens of academic papers and reports, including one leaked from Haiti’s Ministry of the Environment. Among the findings: 

● Haitian workers earn less today than they did under the Duvalier dictatorship.

● Over one-half the average daily wage is used up lunch and by transportation to and from work.

● Haiti and its neighbors have all tried the “sweatshop-led” development model – and it has mostly not delivered on its promises.

● At least six Free Trade Zones or other industrial parts are in the works for Haiti.

The new industrial park for the north does not come without costs and risks: Massive population influx, pressure on the water table, loss of agricultural land, and it’s being built steps from an area formerly slated to become a “marine protected area.”

In this series, the names of workers have been changed to protect their identity because, despite the fact that the Haitian Constitution recognizes the right of free speech, and the right for workers to organize, most workplaces are pervaded by fear due to the strong anti-union sentiment. All interviews took place in the spring and summer of 2011. 

Salaries in the "new" Haiti

"I have a problem with my country, Haiti,” said Evelyne Pierre-Paul. “I've been working in factories here for 25 years, and I still don't have my own house."

Pierre-Paul, 50, doesn't even rent a house. Before the Jan. 12, 2010, earthquake, she and her three children rented two rooms for 10,000 gourdes (about US$250) a year. But the building was destroyed in the earthquake. Twenty-two months later they are still living under a tent, in one of the capital's hundreds of squalid refugee camps.

            Pierre-Paul's average daily take-home wage is actually more than Haiti's rock-bottom minimum. She earns about 225 gourdes or US$4.69 a day. But that doesn't cover even half of what would be considered a family's most basic expenses. Like all the other workers Haiti Grassroots Watch (HGW) surveyed, only some of Pierre-Paul's children attend school, and the family rarely eats meat.

"When payday comes, you pay all the little debts you accumulated, and you don't have anything left," the worker told HGW.

Pierre-Paul sews clothes for One World Apparel, a giant hanger-like factory owned by two-time failed presidential candidate Charles H. Baker. The cloth comes in duty-free, workers cut it up, stitch the pieces together, and the clothing – for K-Mart, Wal-Mart and for uniform supply companies – goes back out. Even though it’s not in a Free Trade Zone (FTZ), The factory enjoys a number of tax benefits like a 15-year exemption on payroll taxes and no Value Added Tax, thanks to the Investment Code enacted during the truncated 2001-2004 mandate of President Jean-Bertrand Aristide. [Baker helped lead the Feb. 29, 2004 coup d’état against Aristide - HL.]

Currently, about 29,000 workers, about 65% of them women, cut and sew in Haitian textile factories assembling clothes for Banana Republic, GAP, Hanes, Gildan, Levis, and dozens of other well-known labels. But if the Martelly government, the Interim Haiti Recovery Commission (IHRC), the U.S. State Department, the World Bank, George Soros, and a host of others involved in Haiti's "reconstruction" see their visions realized, there will soon be 200,000 or even 500,000 assembly workers in FTZs and industrial parks all over the country.

That prospect doesn't interest Pierre-Paul too much.

One recent night, after a ten-hour workday, the slightly hunched sewing machine operator met with a journalist in one of her tent's "rooms." A plastic table and a few chairs are jammed up against the canvas walls. In the other "room," the worker has a bed where she and all her children sleep. Clothes are neatly piled in the corner. Pierre-Paul makes food – lots of spaghetti – on a charcoal fire outside.

"I don't see any future in this for my children," she commented.

That's not surprising. Pierre-Paul's wages have one-third less buying power than they did 25 years ago when she first began her factory career. Minimum wage has gone from about US$3 a day in 1982 (in 1982 dollars) to 200 gourdes, which is about US$1.61 a day in 1982 dollars [about US$5 in 2011 dollars - HL] . Even taking into account Pierre-Paul's slightly higher average wage, she still makes only US$2.53 a day in 1982 dollars. [Haiti’s minimum wage in 1982 was $2.64 a day - HL.]

Downwardly Mobile

During its investigation, HGW learned that most workers today earn more than the minimum wage, but that the salary remains less than it was in 1982.

An in-depth study conducted by HGW with eight workers in the capital and from the country's biggest FTZ – the Dominican-owned CODEVI park on the Haitian-Dominican Republican border – determined that the average worker wage is about 236 gourdes a day – that's $2.53 in 1982 dollars. (Two factory owners, Baker and Clifford Apaid, confirmed that average.) According to HGW's statistics, the average worker's annual salary, including the traditional "thirteenth month" bonus, would be about $153 a month or $1,989 per year.

HGW's study also found that the average worker spends more than half of his or her wage just getting to work and back and eating lunch.

Averages of workers' typical commute and lunch expenses

Transportation and food represent only a tiny percentage of a workers’ responsibilities. For example, the average worker surveyed supports over four people, three of them children. Average school fees carried for each worker, according to HGW’s study, come close to US$690 annually.

While HGW could not verify all of the figures, a recent study from the US- labor federation came up with an even higher numbers for transportation, school fees and other expenses. According to the AFL-CIO’s Solidarity Center,  a “living wage” for an average factory-worker family with one wage-earner and two children should be about $749 per month – almost five times the current average assembly worker wage of $153 per month.

“This figure represents the actual cost of living and serves as a baseline for an appropriate minimum wage that will promote sustainable economic development,” the Solidarity Center noted in its Mar. 3, 2011, report.

“The salary question is a veritable scandal,” economist Camille Chalmers told HGW in an interview. “The salary has gotten lower and lower, also. [Workers] get paid in gourdes but in fact [because almost half of food eaten in Haiti is imported], they consume in dollars.”

Pierre-Paul said she knows the salary is not enough.

“I don’t have any choice,” she explained. “My parents didn’t have me learn a skill, so when I was 25, and I didn’t know what else to do, I resigned myself to factory work.”

Pierre-Paul’s boss, factory owner Charles H. Baker, admits the salary is not “livable.”

“If a person is honest, it’s clear that it’s not enough,” Baker admitted.  “If I could give a worker 1,000 gourdes a day, I’d pay that. But the conditions in Haiti don’t permit us to pay 1,000 gourdes.”

Baker and other factory owners might claim they want to pay more than sweatshop wages but they have fought salary hikes and unions ever since they got into the game.

Under the Duvalier regime – when wages were actually higher than today – only the dictatorship-sanctioned “union” was allowed. Since then, owners have (so far) nearly crushed any organizing efforts.

Thanks to the hard work of the labor group Batay Ouvriye (Worker’s Struggle) and the courage of workers there, who endured threats, job losses and even beatings, over 3,000 laborers at the CODEVI park on the Haitian-Dominican border belong to a union. The union negotiates a collective contract for all the workers there.

This fall Batay Ouvriye and textile workers got a union going in the capital. On Sep. 15, organizers announced the new, legally registered Textile and Clothing Workers Union (SOTA - Sendika Ouvriye Tekstil ak Abiman). In less than two weeks, however, five SOTA executive committee members had been fired, one of them from Baker’s One World Apparel.

Batay Ouvriye’s spokeswoman Yannick Etienne said the firings – which factory spokespeople said were for “violations,” were totally predictable. “It’s very coincidental that one week after the union is announced, five committee members are fired,” she said. “They decapitated the union.”

Asked about the incident, Baker said his lawyer had advised him not to comment. But according to Batay Ouvriye, workers were fired after handing out leaflets in the street, refusing to work overtime, and other actions which are completely guaranteed by Haitian law.

After a long investigation, on Nov. 24, 2011, a United Nations organization revealed that the firings were not just. Better Work, an organization set up by the UN’s International Labor Organization (ILO), noted that “there is solid evidence showing that the representatives of SOTA were fired because they belong to a union” and recommended “the reintegration with back pay as a means of reparation” for the union members.

The September firings are only the latest in the three decades of repression and union-busting.  

Anti-union, pro-"race to the bottom"

Evelyne Pierre-Paul has never been in a union. As a sewing machine operator at Baker’s One World Apparel, she's afraid to even talk about the subject.

"You have to create unions in secret because if you utter the word, you can get fired," Pierre-Paul said. "The bosses say that if we form unions, we'll destroy business."

National law and international conventions guarantee Haitian workers the right to organize and to collective bargaining. As recently as 2010, however, the International Trade Union Confederation's (ITUC) Annual Survey of Violations of Trade Union Rights noted that in Haiti "employers have enjoyed absolute freedom" to repress organizers, due to political turmoil and other factors.

"Those trying to organize workers in a union are constantly harassed or dismissed, generally in breach of the labor legislation,” the ITUC survey reported. “To prevent workers from joining unions, employers give bonuses to those who are not union members."

More recently, Better Work, charged by the ILO with assuring all Haitian textile factories taking advantage of the U.S. congressional HELP [Haiti Economic Lift Program] act comply to international labor standards, said much the same thing. In its April 2011 report, Better Work noted numerous violations like the lack of written contracts, the lack of proper record-keeping on hours worked, forced overtime and too much overtime, failure to grant proper paid leave, and failure to give proper lunch breaks. Better Work investigators also noted that there were no unions in any of the Port-au-Prince factories.

"Better Work Haiti notes very significant challenges related to the rights of workers to freely form, join, and participate in independent trade unions in this industry in Haiti," the report said.

But while Better Work notes "significant challenges" regarding the right to organize, director Richard Lavallee admitted that his office can't do much to assist that situation, aside from file reports and make recommendations.

"Better Work has a collaborative relationship" with the factories, he told HGW. "Coercitive power doesn't come from Better Work."

Incredibly, Lavallee told HGW that workers said they didn't understand the meaning of "union."

"When we interviewed workers to ask if they had colleagues who were fired because of trying to organize, we heard responses like, ‘What is a union?'" he said.

Whether or not Lavallee really believes that is possible, one thing is certain: factory owners and supervisors know which workers speak with Better Work investigators. Information in a report that criticizes a factory or certain supervisor would be easy to source. It is highly probable that workers exercise self-censorship.

That's certainly what workers told HGW.

Ginette Jean-Baptiste operates a sewing machine in Baker's One World Apparel. She was interviewed by HGW away from the workplace. She echoed what workers at Haiti's factories have said for decades: talking about unions and organizing can lead to a pink slip.

"We can't make our demands heard at all,” she told HGW. “You can't talk about that even with each other because someone will tell on you and you'll get fired." 

Decades of Union-Crushing

In 2004, when Batay Ouvriye (BO) was helping organize at the Dominican-owned maquila park CODEVI on the Haitian-Dominican border,  hundreds of workers were laid off. BO and others claimed the lay-offs were a direct result of the organizing. But at the time, Baker, then vice president of the Association of Haitian Industries (ADIH), did not hesitate to defend the Dominican employers.

"I'm very disturbed because as a Haitian, I'm trying to create jobs," he told Inter Press Service. "These people [BO and its international supporters] are spreading lies on the Internet. This kind of thing kills our business here."

But they were not lies. And business was not "killed."

BO and the workers prevailed. Today, over 3,000 workers at CODEVI are unionized and all workers benefit from a collective bargaining agreement, although salary remains rock-bottom. Minimum wage for the approximately 6,500 workers is 868 gourdes (US$21.70) a week.

In the face of local organizing and international scrutiny and solidarity, Baker and other industrialists fight tooth-and-nail against raises, saying they pay as much as possible, and arguing that the foreign companies who out-source stitching jobs to Haiti would pick up and leave if workers were better paid.

Washington appears to agree. In 2009, with the backing of the US embassy, ADIH fought hard against an attempt by parliamentarians to raise the minimum wage to 200 gourdes (US$5) a day. As reported in Haiti Liberté and The Nation, "contractors for Fruit of the Loom, Hanes and Levi's worked in close concert with the US Embassy when they aggressively moved to block a minimum wage increase" voted by Parliament.

The U.S. State Department’s Agency for International Development (USAID) helped pay for a study that, not surprisingly, "found that an HTG 200 Haitian gourde minimum wage would make the sector economically unviable and consequently force factories to shut down," according to what chargé d'affaires Thomas C. Tighe  wrote in a confidential cable to Washington. The US embassy urged "[a] more visible and active engagement by [then-President René] Préval." Two months later, the president apparently convinced the Parliament to set a two-tiered minimum wage that allowed assembly industries to pay less than 200 gourdes – 125 gourdes a day until October 2011, and now 150 gourdes a day.

Justifying the "race to the bottom"

According to Baker, and to HGW research, workers often earn more than 150 gourdes. But the wage remains the lowest in the hemisphere – and lower than it was 30 years ago – in a country where the state mostly does not provide nor even subsidize basic needs like housing, electricity, water, education and healthcare.

Industrialists justify the low wages. "When you have a country where 80% of the people don't, anything is good!" according to Baker.

The director of the Free Trade Zone Office [Direction des Zones Franches], agreed. "A worker can eat,” Jean-Alix Hecdivert told HGW. “Even if he can't satisfy his hunger, he can eat."

At CODEVI, Director Miguel Angel Torres echoed Baker. "I do think the salary is really low, but Haiti has 70% unemployment!” he said. “If you don't work, you don't  have anything. If you get 868, at least you can survive… It's better than nothing."

Haitian economist Camille Chalmers has spent years thinking and writing about the devastating effects of neoliberal economic policies on Haiti. For Chalmers, sweatshop wages for exported textiles, produced by local and foreign capitalists, are not "better than nothing."

"It's a big error to bet on the slave-wage labor, on breaking the backs of workers who are paid nothing while [foreign] companies get rich,” Chalmers said. “It's not only an error, it's a crime."

The economist admitted that assembly industries do create jobs but – referring to the capital's main industrial park "boom" years in the 1980s – he said that "while SONAPI [Société National des Parcs Industriels] might have created 60,000 jobs, it also attracted two million unemployed people."

Just like in Mexico, with the maquila boom, tens of thousands of landless peasants flowed into Haiti's capital in search of jobs.

Assembly factories "don't resolve the unemployment problem, they don't resolve the production problem," Chalmers added. "They work with imported materials, they're enclaves. They don't have much effect on the economy."

Haiti's not the first place to have "enclaves." International corporations based in North America, Europe and parts of Asia have been off-shoring as much labor as possible for decades in order to save on labor costs. And as wages rise in one country, the companies pick up and move on to someplace with lower wages. The concept of "race to the bottom" is by now well understood.

CODEVI's Torres understands the "race" well. Dominican factory owners started to move across the border because "in the 2000s, we realized it was too expensive in the Dominican Republic,” he said. “The clients couldn't pay the labor costs."

In a report for Georgetown University, Professor John M. Kline noted that rising labor costs on the eastern half of Hispaniola, and the 2005 expiration of "Multi-Fibre Agreement," led to the loss of over 82,000 jobs in the Dominican Republic between 2004 and 2008, "nearly two-thirds of the sector's total employment," he wrote.

Ignorant or mendacious, the cheerleaders for Haitian sweatshop labor fail to mention the fate of those 82,000 Dominican workers. In fact, the Dominican economy, supported by remittances, ranks in the top 25 countries with the most skewed income distribution and has high structural unemployment.

But that doesn't seem to matter to former President Bill Clinton. Speaking to the September 20 session of the Clinton Global Initiative meeting in New York City, he pushed Haiti to get to the front of the pack. "I predict to you - if they [Haitians] do it right - they will move to the top in the region and then they will spark this race all over the Caribbean," he told investors.

Factory owner Baker admits he is part of the race. "Yes, it's a race to the bottom… if you count on it!" Baker said.

Baker claims that low-wage, low-skilled assembly industries are temporary, a "stepping stone," and that they will be a big part of the Haitian economy for only about "ten or 15 years."

"I count on it only as a stepping stone,” he said. “We're going up the stairs and it's one of the steps."

Dozens of countries – and indeed, Haiti, on and off for the past 30 years – have already tread those same "race to the bottom" steps.

(Next week: Why is Haiti “attractive” and what’s planned for Haiti?)