Haiti’s New Minimum Wage
In recent years, the demands of the working masses in Haiti have converged on a demand for an increase in the minimum wage. Many battles have been waged by groups, including the trade union class, against various governments to impose the principle of minimum wage on governments and employers. Today, it is a social achievement that is the fruit of a long-term fight—an endless struggle, a cause that deserves to be always defended.
Definition and composition of salary
Wage refers to remuneration or earnings due by an employer to a worker under an employment contract for work performed or to be performed, or for services rendered or to be rendered. Wages can be paid per unit of time, per task, per piece, or in a lump sum.
According to Article 135 of the Labor Code, the term “salary” means, whatever the name and method of calculation, the remuneration or earnings likely to be assessed in cash and fixed by agreement or by law, which an employer owes to a worker under a written or verbal employment contract, either for work performed or to be performed, or for services rendered or to be rendered.
Different types of salaries
Minimum wage—The minimum wage is the amount required by law to be paid. It is the minimum compensation an employer can legally pay an employee for work. The minimum wage is also defined as the minimum remuneration that the employer is obliged to pay employees for the work they perform during a given period, which cannot be reduced by a collective agreement or an individual contract.
Wage by the task or by the piece (Production Wage)—A piecework wage is one that is paid to a worker to do a specific job for a set price. The piece rate is the wage paid to a worker to complete a specific task for a fixed price per unit.
Basic salary—Basic salary refers to the salary received by the employee or worker excluding benefits paid for overtime.
A brief history of wages in Haiti
Until 1934, the salary was determined by the employers. The first law to establish a minimum wage was passed on August 10, 1934. The minimum wage was revised upwards in 1945 and then in 1947. It was raised again 37 years later, in 1984, in 1995, and then again in 2003, 2009, 2010, 2012, 2014, and 2016.
The struggle for a minimum wage in Haiti is a compelling narrative in and of itself. Just to refresh your memories, it is the culmination of a long social fight, conducted with bitterness and narrowly won by Steven Benoit, a former member of Parliament for Pétion-Ville, following a painful showdown with the then-current government and employers around the year 2000. This law, which bears his name, served as the starting point for any wage dispute between the employers of subcontracting factories owned by the National Company of Industrial Parks (SONAPI) in the Port-au-Prince metropolitan area and those owned by the Industrial Development Company (CODEVI) in the North East, as well as the unions. Because of the Benoit law, a mixed agency, the Superior Council of Salaries (CSS), was established to serve as an intermediary between the government, employers, and labor unions in the course of collective bargaining agreements.
New Minimum wage
According to an official declaration from the office of de facto Prime Minister Ariel Henry, the daily minimum wage in subcontracting factories has been set at 685.00 gourdes per day. The salaries for various other sectors of activity were also set during a meeting of the Council of Ministers, which took place on Sunday, February 20, 2022, said the Prime Minister.
For the past two weeks, the government has been talking to the unions about the minimum wage, as thousands of textile workers took to the streets to demand a daily minimum wage of 1,500.00 gourdes, up from the 500.00 gourdes that was previously in effect.
The last modification to Haiti’s daily minimum wage occurred in November 2019, when the labor code required revisions with each increase of at least 10% in the rate of inflation, which analysts estimate is currently about 24 percent.
Effects on labor productivity
Recent studies show that the minimum wage contributes to reducing wage dispersion and raising wages ‒ thus reflecting productivity gains ‒ but that it can also improve productivity, at the level of labor—business as in the global economy.
At company level
A high minimum wage is a motivating factor for workers. Various studies confirm the “efficiency wage” theory, initially developed by Akerlof in 1982 that employees are more motivated if they have a better salary.
Moreover, employees may tend to work longer for the same employer and thus gain valuable experience, encouraging the employer to offer them training that can improve productivity. Dube, Lester, and Reich (2012) find that the lower turnover of restaurant workers in California is attributable to the minimum wage, which reduces wage competition between companies that pay their employees poorly. Employers who improve employee retention enable people to learn on the job and, over time, become more productive.
Some researchers believe that productivity gains can also result from job cuts due to the minimum wage, as firms substitute capital for workers and adopt more investment-oriented production technologies.
Although this is possible, especially when the minimum wage is too high, other research shows that productivity gains in firms are the result of different measures taken to absorb the increase in the minimum wage and labor costs, such as organizational changes, training, and salary efficiency.
In conclusion, the minimum wage is a critical worker protection measure that is implemented in a large number of countries. Its primary objective is to guarantee that employees have a reasonable level of living. It is typically enacted by legislation or collective bargaining. It can act as a buffer against the absence or ineffectiveness of collective bargaining in nations with low union membership. Wages are a critical component in determining a company’s competitiveness and appeal. Receiving a salary that is proportional to one’s cost of living is a significant social achievement of the twentieth century. These social victories, however, must always be guarded.
Whatever the kind of labor one performs, whether physical appearance is required or not, whether it is rewarding or not, whether it is lengthy or brief, it is proper to receive compensation in proportion to the task performed, for every work deserves compensation.