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Wikileaks Cables: U.S. Companies, Diplomats Fought To Prevent Minimum Wage Increase In Haiti’s Textiles Factories

By Zaid Jilani on June 8, 2011 at 2:02 pm

"Wikileaks Cables: U.S. Companies, Diplomats Fought To Prevent Minimum Wage Increase In Haiti’s Textiles Factories"

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Hanes thought it would be too expensive to pay Haitians $5 a day.

As ThinkProgress reported earlier, The Nation magazine and the Haitian weekly newspaper Haïti Liberté have announced a partnership where they will publish revelations from leaked American diplomatic cables made public by Wikileaks. Over the weekend, the papers published evidence that the U.S. aggressively worked to scuttle a gas development deal on behalf of Big Oil and to counter the influence of left-wing governments in the region. Now, The Nation has published a report detailing efforts by the United States under the Obama administration to successfully defeat a hike in the minimum wage in the textile industry to $5 a day.

In 2009, the Haitian parliament unanimously passed a measure that would hike the Haitian minimum wage to $5 a day. Yet much as the United States government mobilized to protect Big Oil’s profits a few years earlier, American diplomats immediately protested the hike in wages.

Contractors for large American clothing firms like Fruit of the Loom, Hanes, and Levi’s began protesting the increase in the minimum wage, aggressively lobbying the parliament and the populist Haitian president, René Préval, to reverse course. They were soon joined by American diplomats who began to lobby the Haitian government as well, arguing that it would be too costly for textile manufacturers. As one cable noted, “more visible and active engagement by Préval” would be crucial to reverse the hike. Deputy chief of mission David E. Lindwall argued in one cable that the wage hike “did not take economic reality into account” and that the measure was intended solely to appease the “the unemployed and underpaid masses.”

The U.S. Agency for International Development and the Association of Haitian Industry — the main trade organization for textile manufacturers in the country — both funded studies claiming that raising the wages would “make the sector economically unviable and consequently force factories to shut down.” Yet at the same time, in private cables the embassy noted that the wage “had support from a majority of Haitian private sector representatives” because of “reports that wages in the Dominican Republic and Nicaragua (competitors in the garment industry) will increase also.”

In August 2009, Préval partially conceded to the demands of the garment industry and the United States. He negotiated a new arrangement with his parliament that would offer a special carveout for the textile sector — allowing it to pay $3 a day rather than $5 a day — which marked a huge win for major textiles corporations like Hanes and Dockers.

Commenting on the revelations, the Columbia Journalism Review (CJR) calculates exactly how little it would’ve cost the clothing companies to comply with the new $5 a day wages. “Haiti has about 25,000 garment workers. If you paid each of them $2 a day more, it would cost their employers $50,000 per working day, or about $12.5 million a year.” CJR notes that if Hanes had to comply with the new law, it would cost them about $1.6 million a year — yet it made $211 million in profit last year. Yet unfortunately for the people of Haiti, Hanes’ greed was too great to sacrifice so little to help so many.

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