Are There Two Sides To Opposing Doubling the Minimum Wage In Haiti?

Kyle blasts the Obama administration for weighing in against a minimum wage increase in Haiti from $0.24/hr to $0.61/hr, which would have affected local contractors who sell products to American companies such as Levi Strauss and Hanes. (The wage increase was scaled back to $0.31 for textile workers as a result of Obama Administration lobbying.)

Obviously, anyone who's vaguely human is going to want to see people in Haiti do better than they're doing now. And obviously, the amount of cost that this change would add to jeans and undershirts is pretty minimal.

The thing that's worth asking in this situation is whether the proposed minimum wage increase actually benefits people in Haiti or not. From the source (The Nation broke the story) I would imagine that the assumption is that this is a simple matter of taking a small amount of money from Hanes and Levi and a few other companies (actually, reading around, it appears that Hanes and Levi do not in fact operate the factories in Haiti, they just buy stuff from locally run factories there) and giving that money to workers in Haiti who will clearly be much better off. If that is all there is to it, it's hard to oppose.

To the extent that there's a reasonable cause for the Obama administration to weigh in against this, it would be concern that this move would in fact hurt Haitians overall. The increase from $0.24 to $0.61/hr may seem very tiny to us, but it's more than a doubling of the wages for workers and labor costs for employers on the ground actually in Haiti. This is in a country in which two thirds of potential workers can't get formal jobs anyway. (Meaning that at best the 1/3 best off Haitians would be affected by this increase.) So it could well be that this would result in making the barriers to expanding formal employment even higher than they are already. And at best offer a meager "trickle down" to the two thirds who aren't formally employed from the one third who are.

If this is just a move on the part of the Obama administration to help out some friends in the fashion industry, it's pretty disgraceful. But it may well be that, having been alerted by Levi and Hanes' self-interested complaints, the economists in the administration honestly think that this will overall hurt the Haitian economy, which doesn't exactly have a surfeit of jobs in the first place. Goodness knows, it wouldn't be the first time that Haiti had hurt itself with policies that seemed like they would help people but in fact made things even worse. If there's some example out there in which doubling the minimum wage in an economy with unemployment around 50% was a helpful move, I am not aware of it, though I am sure that those at The Nation are willing to put their full faith into hoping for the best.