The Minimum Wage and the Coup in Honduras

The coup in Honduras - and the at best grudging and vacillating
support in Washington for the restoration of President Zelaya - has
thrown into stark relief a fundamental fault line in Latin America and
a moral black hole in U.S. policy toward the region.

What is the minimum wage which a worker shall be paid for a day's labor?

Supporters of the coup have tried to trick Americans into believing
that President Zelaya was ousted by the Honduran military because he
broke the law. But this is nonsense. A Honduran bishop told
Catholic News Service,

"Some say Manuel Zelaya threatened democracy by proposing
a constitutional assembly. But the poor of Honduras know that Zelaya
raised the minimum salary. That's what they understand. They know he
defended the poor by sharing money with mayors and small towns. That's
why they are out in the streets closing highways and protesting (to
demand Zelaya's return)"

This is why the greedy, self-absorbed Honduran elite turned against
President Zelaya: because he was pursuing policies in the interests of
the majority. The Washington Post noted
in mid-July,

To many poor Hondurans, deposed president Manuel "Mel"
Zelaya was a trailblazing ally who scrapped school tuitions, raised
the minimum wage and took on big business.

In a statement condemning support for the coup by U.S. business
groups, the International Textile, Garment and Leather Workers'
Federation expressed
its concern that under the coup regime, there are

worsening working conditions, and in particular at efforts
to claw back a wage increase ordered by President Zelaya six months
ago in order to reflect the increased cost of food and other
essentials. In reality the increased wage barely covered 90% of basic
food needs and less than a third of a living wage covering basic needs
such as food, rent, transport, education, and medical care.

It's not just in Honduras that raising the minimum wage provoked a
coup. In reporting about efforts by Haitian lawmakers this week to
raise the minimum wage in Haiti, AP noted:

Former President Jean-Bertrand Aristide was overthrown in
2004, in part after business owners angered by his approval of an
increased minimum wage organized opposition against him.

This May, the Haitian Parliament approved a proposal to triple the
minimum wage to about $5 a day. But President Preval rejected this,
saying

the increase should omit workers at factories producing
garments for export. Preval said those workers should receive an
increase to about $3.

What's the argument in Haiti against raising the minimum wage?

The debate has fueled unrest across the impoverished
Caribbean nation, with some critics arguing that an increase would
hurt plans to fight widespread unemployment by creating jobs in
factories that produce clothing for export to the United
States.

There are the magic words I search for in these articles, often buried
at the bottom: "United States."

So, the argument is being made that Haiti can't afford to raise the
minimum wage for workers in the export sector to $5 a day, because if
they did Americans would buy clothes and shoes produced in some other
countries.

Let me underline this, dear reader. You, as an American consumer, you
are being invoked in Haiti as the reason that the minimum wage cannot
be raised to $5 a day.

Of course this is nonsense. The overwhelming majority of Americans,
along with the overwhelming majority of Haitians and Hondurans, would
be absolutely delighted if Haitian and Honduran workers producing
clothes for the U.S. market would be paid more. Labor costs are a
small fraction of the prices that consumers face. Wages are so low
because that yields even more profits for those who already have more
money than they can ever spend; the low wage floor is being determined
by government policy in Washington, Haiti, Honduras, and elsewhere,
not by the desires of consumers. No magic formula of economics
determines the minimum wage that can be sustained in Haiti and
Honduras. At the margin - whether the minimum wage shall be $3 a day
or $5 a day in the export sector in Haiti - it is determined
politically.

If you say that the leverage of the U.S. consumer market should be
used to support higher wages for poor workers in poor countries,
rather than the opposite, you're likely to be told that this is not
allowed. This leverage has been allocated to something else. The power
of the U.S. market can only be used for things like forcing developing
countries to enforce the patents, trademarks, and copyrights of U.S.
pharmaceutical companies, software companies, and Hollywood.

Indeed, if you say that we should be supporting efforts to raise the
minimum wage in Honduras and Haiti, you'll likely to be accused of
"trying to impose American values." But this is a baldfaced lie, the
twisted-mirror image of the truth. The majority of Hondurans and the
majority of Haitians want the wages of workers producing for export to
the United States to be raised. Far from imposing "American values,"
in Honduras and Haiti, we're imposing Wall Street values, every day,
through U.S. government policy, against the wishes and interests of
the majority of the population, there and here.

And by its failure to help effectively Latin American efforts restore
President Zelaya, the Obama Administration is helping to drive down
the minimum wage in Honduras, Haiti, and throughout the world. And the
reason that the Obama Administration is, de facto, taking the side of
the corrupt and greedy ruling elite in Honduras, is that, as usual,
U.S. foreign policy is being determined by Corporate America, not Main
Street America, because the power and efforts of Main Street America
to affect U.S. foreign policy in Honduras - the U.S. labor movement
and its friends, basically - is too weak, compared to the
infrastructure and efforts of Corporate America's actions to shape
U.S. policy.

Count this too as a casualty of the failure of Congress to pass the
Employee Free Choice Act. If the Employee Free Choice Act were law,
and more American workers were organized into unions, Main Street
would have more power in Washington, and Corporate America wouldn't be
calling the shots on U.S. policy towards Honduras.

So, the next time some lying moron invokes "economics" to "explain" to
you that the wages of impoverished third world workers who produce for
the U.S. market cannot be raised, remember the coup in Honduras, and
how Washington sat on its hands while a democratically elected
government was punished by greedy elites with a military coup for
trying to raise the minimum wage.