Archive for Monday, February 22, 2010

Can garment industry save Haiti?

February 22, 2010


2010 Haiti Earthquake

A 7.0 magnitude earthquake occurred 10 miles southwest of Port-au-Prince on Jan. 12, causing widespread devastation in Haiti's capital and throughout the country.

— Jordanie Pinquie Rebeca leans forward and guides a piece of suit-jacket wool and its silky lining into a sewing machine, where — bat! bat! bat! — they’re bound together to be hemmed.

If she does this for eight hours, she will earn $3.09. Her boss will ship the pinstriped suit she helped make to the United States, tariff-free. There a shopper will buy it from JoS. A. Bank Clothiers for $550.

In the quest to rebuild Haiti, the international community and business leaders are dusting off a pre-quake plan to expand its low-wage garment assembly industry as a linchpin of recovery. President Barack Obama’s administration is on board, encouraging U.S. retailers to obtain from Haiti at least 1 percent of the clothes they sell.

But will that save a reeling country whose economy must be built from scratch?

High unemployment

Few Haitians have steady incomes, and unemployment is unmeasurable; before the quake it was estimated at between 60 and 80 percent. In cities, most scrape by selling in the streets, doing odd jobs or relying on remittances from abroad that make up a quarter of Haiti’s $7 billion gross domestic product.

Garments are central to the economic growth plan commissioned by U.N. Secretary-General Ban Ki-moon last year, a 19-page report written by Oxford University economics professor Paul Collier and promoted by former President Bill Clinton as special envoy to the impoverished nation.

They say the sector could quickly produce hundreds of thousands of jobs thanks chiefly to two things: an existing preferential trade deal with the nearby United States, and cheap Haitian labor.

The deal is the Haiti Hemispheric Opportunity through Partnership Encouragement Act, or “HOPE II.” Passed by the U.S. Congress in 2008, it lets Haiti export textiles duty-free to the U.S. for a decade. Last year, $513 million worth of Haitian-made apparel, the bulk of exports, was shipped with labels including Hanes and New Balance. Factory profit margins average about 22 percent, according to Washington-based Nathan Associates Inc.

The cheap labor is Jordanie Pinquie Rebeca, and others like her.

During a recent shift at the South Korean-owned factory where she works six days a week, employees softly sang a Creole hymn beneath the hot fluorescent lights: “Lord, take my hand. Bring me through.”

It was HOPE II that persuaded the bosses to move their Dominican plant and rename it DKDR Haiti SA. Nearly all the 1,200 people still working there after the quake make the new “outsourcing” minimum wage of 125 gourdes a day, about $3.09 — approximately the same as the minimum wage in 1984 and worth less than half its previous purchasing power.

Wage compromise

Pay was even lower last year when lawmakers raised the country’s minimum from $1.72 a day to almost $5 in response to protests. But owners complained, and President Rene Preval refused to enact the law. A compromise allowed non-garment workers to receive the higher minimum, but stuck factory workers with the “outsourcing” wage.

DKDR complied but cut production-based incentives, according to general manager Chun Ho Lee. Producing 600 pieces in a day used to yield a worker a bonus of $2.47. Now it’s worth $1.23.

Rebeca, though stylish in her paperboy hat and spaghetti-strap dress, sleeps on the street and barely eats. With a day’s pay she can buy a cupful of rice and transport via group taxi, and pay down debt on her now-destroyed apartment. Anything left over goes to cell phone minutes to call her boyfriend, who was evacuated to the Dominican Republic with a leg fracture sustained in the quake, or her 4-year-old son, Mike, whom she sent to live with relatives in the countryside.

Meanwhile, holding that low-paying job makes it tough to get handouts from relief workers.

“The foreigners are giving people food outside, but I can’t get anything. I have to stay here working all day,” she said.

All sides agree that garment-industry wages are too low to feed, clothe and house workers and their families. Even factory owners acknowledge that reality — though they deny running sweatshops and say the businesses have an important role.

“It’s not enough to make a decent living, but it’s the first step” toward economic recovery, said George Sassine, president of the Association of Industries of Haiti.

Others said relying too much on clothing assembly is risky.

Prime Minister Jean-Max Bellerive, himself an economist, said that while the garment industry shouldn’t be ignored, increased investment should be sought in more enduring sectors such as agriculture and tourism.


just_another_bozo_on_this_bus 8 years ago

"Can garment industry save Haiti?"

"If she does this for eight hours, she will earn $3.09. Her boss will ship the pinstriped suit she helped make to the United States, tariff-free. There a shopper will buy it from JoS. A. Bank Clothiers for $550."

The answer is clearly, "no." But whoever collects the $547 balance on the sail of that suit is doing quite well, and that's been the story of Haiti for at least the last 500 years.

just_another_bozo_on_this_bus 8 years ago

A very strong case can be made that Canada, the US and France owe Haiti $billions in reparations. Aristide began making that case when he was last president of that country, which is almost certainly the reason for the US- and French-backed coup against him in 2004.

madameX 8 years ago

The garment industry is ridiculous. Cheap brands use abusive labor practices to keep prices down. Expensive brands do the same because they can and because they can maximize profits. It makes me want to not buy any more clothes ever again.

Maybe clothing manufacturers should be required to include with the price of the garment how much was spent on labor and materials. That way someone buying a $500 suit that probably cost a tenth of that to make would at least be doing so in awareness of how badly they're being ripped off and how exploited the person who made it probably is.

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