Santo Domingo.- The proposed bill that would raise wages ranging from RD$25,000 to RD$50,000 by 30% will create an “untenable” situation for most companies, which would force them to layoff workers.
The warning comes from Jaime Gonzalez, president of the employers grouped in Copardom, who affirms that the legislative initiative for a general wage hike for all private sector workers contradicts the country’s current labor norm.
Citing Social Security Treasury figures showing that 97% of the nearly 44,500 registered employers are micro, small and medians companies, the business leader said the bill’s untenable increases will lead to layoffs. “Those are the companies that cannot withstand an indiscriminate and un-consulted rise as the bill proposes, which will mean layoffs and more unemployment in the country, precisely when inflated prices oppress the entire working population, mostly that 14% which is unemployed.”
The initiative now in the Senate would increase the minimum wage by 30%, and 25% from there to a salary of RD$50,000 monthly.
From: Dominican Republic, Puerto Plata
What happens next is a general price ike of 30%, and up up and away..
From: Dominican Republic, vieja Santo Domingo
yes we arrive at a chicken and egg situation ,,but there is a definite need for the lower levels of wages to be raised so the poorer people can afford just the basic essentials of living .If it was solely left to the employers , employees would never get a wage rise .
Written by: anthonyC, 7 Apr 2011 12:04 PM
From: United States
30%?????
Are they out of their F*cking Minds? Jeez. I have heard of starting high in negotiations but seriously?
From: United States, Yonkers, NY
I think 10% would be fair.
Written by: Atabey, 7 Apr 2011 12:25 PM
From: United States, NYC
I said before, DR can not price itself out of the market place. If it attempts to do such a foolish policy shift, the marketplace will react in a negative way: less investment flows, less jobs, more miserable existence, especially for the poor. DR missed an opportunity to take the hard medicine back in the late 1960s and 1970s. She is paying the price for not having done so back then, and is faced with competing pressure from low wage production. Labor wages must reflect productivity and competitive pressure from like producers! DR is not the only game in town, and investors will flee DR and set-up shop, perhaps in Haiti and certainty other low wage nations in Central America that are business friendly and stable.
From: United States, Brooklyn
Can somebody shoot this A-hole (Gonzales)
What a dumb freaking statement!
From: United States, Brooklyn
"Jaime Gonzalez affirms that a general wage hike for all private sector workers contradicts the country’s current labor norm."
Yes Mr. Gonzalex thats the point, The Current Labor Laws, Rewards the rich, the Haitians, and Destroy the Dominican Poor, and Sends Dominicans abroad....
This Idiot MOFO
From: United States, Washington
@ Atabey - you've just identified the dilemma under a neo-liberal market-based international trade system in which a nefarious "race to the bottom" is promoted by trade agreements that foster competitive, low-value production processes to be centered in periphery countries. According to your logic, Atabey, then to promote investment and competitiveness, the DR should actually look into cutting wages, potentially creating more jobs, just really sh*tty ones :-/
A balanced approach needs to be reached. Moreover,it would be better, if a regional approach, perhaps among the DR-CAFTA countries, to multilaterally address these labor issues were adopted. B/c if any one periphery country, god forbid, decides to actually improve the situation of workers, then they, like Atabey has so eloquently described, will be hammered by investors and markets controlled by the core countries. We should look at Chile to see how they've approached these issues- i.e., capital flow controls!
From: United States, Washington
One more thing - employers tend to balk at any attempt by G to attempt to address L issues through regulations. But are we suppose to wait for them to benevolently share the bounty of the record profits attained in certain sectors?
The state can always try to raise revenue by updating the tax code or imposing property taxes on the latifundistas (in order not to hurt the small land-owners), and then providing quality public services that would reduce the need to have higher wages. Let me explain, if quality public services (i.e., schools, health care, water, sanitation, transportation, security, etc.) were effectively provided, that would reduce the need by individual households of buying the "botellones" to drink water, or having to pay private schools, or having to have high security costs, or have a jeepeta b/c streets are in bad shape... The point is, if public solutions were found for public problems, then perhaps higher wages would be less of an issue.
From: United States, Washington
But of course, that assumes a government that actually cares about investing in finding and establishing public solutions to public problems, instead of maintaining clientelist networks by limiting access to resources only to the politically connected or political clients.
From: Dominican Republic, Dominican Republic
Baldoria -- good points, DR should be looking for ways not to have to play a rigged game that only squeezes the poor and middle classes. Also, a general wage hike will stimulate the country's internal economy, which will benefit all those "micro, small and median" employers.
From: United States, Washington
@Capintero- The thing is, that ever since 1492, LAC economies have been shaped in such a way to support the economies of the core countries- By supplying raw materials, and purchasing manufactured goods. In other words, our economies and societies have looked outwards, which has prevented from the development of an internal market and has concentrated resources in the hands of a few elite families. Dependency Theory goes into all these points, and I think that despite the fact we can't ignore the internal problems that have stymied development, we really need to look at how our relationship w/ core countries has also led to our underdevelopment.
If there are any historians out there, they can elaborate on this point, but the LAC region experience one of its greatest growth periods when international markets were interrupted during the world wars. Maybe there's something there...
Written by: anthonyC, 7 Apr 2011 11:00 PM
From: United States
Written by: El_Platano,
"I think 10% would be fair."
What would BE FAIR is those who actually work hard and produce getting a pay raise. Those who are lazy and slack off or have no incentive not getting pay raises.
From: Canada
No matter how low and bad some wages are, 30% is not realistic. In many instances. in countries where economy is trying to get over the latest crisis, people go for an increase equivalent to the cost of living raise + 0.5% to 1%.
Yes, it may seem fair to "pay for quality". However, can you imagine having a a process of qualitative evaluation of work to decide who gets a raise! Not sure at all too many places are ready for that!
Written by: Atabey, 8 Apr 2011 7:51 AM
From: United States, NYC
baldoria23, and Carpintero.
What you are arguing is based on the Wallenstein World System theory. The problem is that this theory of dominant core countries and periphery countries or satellites dependency can not address the REAL development of nations like South Korea, the other Asian Tigers, Singapore, Taiwan, and Chile! How have these nations prospered and gained in the case of South Korea Core status?
Yes, they didn't follow the Neo-Liberal school to the book, but they were able to thrive within the dominant economic forum dominated by the "core elites" USA/Canada, Europe, and Japan" I guess by now Wallenstein has added China into the "core mix" But however you may like to see it, the economic status of those nations that accepted market discipline, devalued their monetary unit to gain international competitiveness at crucial stages of its developmental model,
Written by: Atabey, 8 Apr 2011 8:02 AM
From: United States, NYC
installed strong stable internal leadership and direction that alleviated foreign investors concern with the economic modernization program, invested in education and training, and held wages to minor increases so as not to upset their niche market access and competitiveness. These countries also tried and were largely successful in "piggie-backing" on regional dominant economic players by copying labor intensive processes that the more advance economies were finding difficulties in staying competitive in: textile for instance. As I've stated before, the DR lost a golden chance back in the post Civil War Era to re-direct the course of its economy and gain a toe hold within the larger world economy. Its leaders at the time didn't want to address the over-valued Peso, and looked on massive foreign investment flows suspiciously.
Written by: Atabey, 8 Apr 2011 8:09 AM
From: United States, NYC
More concern with dividing the large Trujillo estates were these slow thinking commercial and business elites and the government leadership at the time was sympathetic with their view to the detriment of the entire nation. But the Global economic order does not stand still, and DR would take precious years to finally begin to address these deficiencies, but now it faced many more players willing to bear any price for a piece of the pie! And that's the predicament she finds herself in: how to address large problems like: education, sanitation, health care, infrastructure, etc, while remaining competitive within the Global economic order? Without a major export resource like oil to fuel modernization, the DR needs desperately to attract foreign investors to its shores or risk economic discombobulation and a general collapse of its society. In other words, becoming another Haiti.
Written by: Atabey, 8 Apr 2011 8:17 AM
From: United States, NYC
The way forward is clear: hard work, low wages, more education and training, and wages salary increases based on productivity gains. Anyone who has read about the South Korean economic development understands how difficult and hard the process was on the people of that nation. Long hard hours working for low wages, their children going to school for long hours of education, a government that directed investment flows into "key industries" to largely piggie-back on the Japanese economy. Sure the Vietnam War was beneficial during the 1960s and early 1970s, but the took advantages.
Dominicans I fear are becoming too caught up with the enormous differences between the pay structure in the US or even PR with those in their native soil. Too many see working for the equivalent as almost a "moral outrage" and seek a "socially determined wage structure." This ain't going to fly internationally and investors will go to other places to but their cash. That's how the game is played
From: United States, Washington
@ Atabey- way to go brother!!! Wallerstein is my hero, and your 100% correct that you have semi-periphery (i.e., Chile, Korea, and the others that you mentioned) are contradictions to the general principle of World System & Dependency Theories. But that doesn't invalidate the general trend.
Like I said, one theory doesn't explain everything, but there are elements that are obviously at work that definitely resemble Dependency theory.
gotta run, but good to engage someone on actual substance, and not yell around.
From: United States
nice work, Atabey. and, welcome back, baldoria. the economic morass is not hard to explain. capitalism is based on one major lynchpin...CONSUMPTION. without it, capitalism is an imaginary idea. what neoliberalism has done is to create a situation wherein the `poor have gotten poorer, while the rich have gotten richer. that modality destroys capitalism, because it destroys consumption. if you do not believe it, put one guy in a supermarket with 100,000 dollars in his wallet. look at his receipt of purchases. then, put 1000 guys in the same spermarket, each with 100 dollars. see who spends more.
Written by: anthonyC, 8 Apr 2011 11:16 AM
From: United States
Dread,
You state that "capitalism is based on one major lynchpin...CONSUMPTION"
You are wrong. The only way Capitalism can work is with Freedom. Freedom of choice to be exact. Every rule or regulation imposed on a society takes it more and more away from the Capitalism Ideal.
All one has to do is look at Hong Kong. An archipelago that has zero natural resources and yet was one of the most successful piece of real-estate on the planet due to limited regulation.
Now look at the poorest nations. All have Highly regulated and centrally controlled economies despite some of them being rich in natural resources. The Bureaucracy created by the regulation combined with that lack of freedoms breeds corruption which just exasperates the situation.
From: Dominican Republic, Cabarete
Imposing increases, especially ones of this size, is always risky. Many businesses are here because of the low wage rates, and don't give a damn about living conditions for their employees. They certainly aren't here for the highly educated, highly skilled labour pool in this country (LOL).
That said, we are very happy with our employees, who we have invested in, work hard with, and we gave them a well deserved increase in January, to reflect the large jump in COL. The increases we gave were actually more than 30%, and I hope we aren't going to be expected to add another 30% on top of that now.
From: United States
Dr anthonyc cautions
You are wrong. The only way Capitalism can work is with Freedom. Freedom of choice to be exact. Every rule or regulation imposed on a society takes it more and more away from the Capitalism Ideal.
anthonyc, whenever a know nothing like you contradicts me, i take it as a badge of honor. a million free men with no money will not make capitalism work. then again, you are beyond being informed. throwing around words like freedom is academically childish. freedom to do what? to starve? freedom from what? you believe that the only way capitalism can work is if there are no price controls, no labor unions, no worker protection, no minimum wages, and no worker benefits. you believe that it only works when there are no restrictions placed upon the owners of the capital, who should be allowed to pay what they like, and charge what they like. well, look where it got the world....
Written by: Atabey, 8 Apr 2011 4:05 PM
From: United States, NYC
"Written by: Cabaretecanuck, 8 Apr 2011 11:41 AM
From: Dominican Republic, Cabarete
Imposing increases, especially ones of this size, is always risky. Many businesses are here because of the low wage rates, and don't give a damn about living conditions for their employees. They certainly aren't here for the highly educated, highly skilled labour pool in this country (LOL)."
Excellent post. The larger society needs to educated about the Gloabl picture. To many wages are but a reflection of some Moral concern when in reality it has nothing to do with Morality and everything to do with Productivity and the competitive dynamics of your niche markets and competitors. People need to wake up and see the larger picture or a feeding frenzy will drive capital flows into the DR. The South Korean held the line on wages and only gradully increased them. They did provide for good education and increased infrastructure investments. Thus while peoples wages didn't go up fast, they did see
Written by: Atabey, 8 Apr 2011 4:07 PM
From: United States, NYC
and experience a general rise in the quality and modernization of their nation over time. It took South Korea something like 30 years to see the hard earned modernization of her country and another 20 years to consolidate the modernization. Now, South Korea has joined the Core group of nations and is a Modern State! 55 years ago she was as poor or poorer than the Dominican Republic!
From: United States, Washington
@Dread - Yeah, I'm jet lagged after coming back to Pak from the US, so good old DT is providing something to do in the wee-hours of the morning.
@Anthony- Freedom is a wonder concept that Neo-Liberals love to use, but that many social-scientists like to question. Like dread alluded to, there are "freedoms" and then "false-freedom." Anyone can go live in Casa de Campo, right? WRONG- only people w/ the $ to pay for it. Anyone has the right to a quality education, right? - again, only if you can afford it :-/ So it's only "freedom" to those who have resources, the working class and poor are still as excluded as if they were living in a feudal society. You may respond, "but people can move up in society..." Yes they can, but w/o a quality education system, w/o proper health care, w/ growing inequality, it doesn't seem as if the possibility of social-mobility (which again is a term Neo-Liberals love) actually increasing the number (or the type) of people who can go live in Casa de camp
From: Dominican Republic, Rio San Juan
Baldoria - you're right on point. Totally agree that U.S. & E.U. are still stealing from us. All the profits these transnational corporations make here, specially in the FTZ, all go back to the U.S., they don't pay taxes, they don't invest in local development...
THey do provide jobs though, which in and of itself are important. But I think things can be better. instead of focusing on developing cheap jobs, lets develop good paying jobs.
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Although this article is not directly related to the topic it is in general a very interesting economic article
http://www.marketwatch.com/story/....illing-your-retirement-2011-04-05
Are they out of their F*cking Minds? Jeez. I have heard of starting high in negotiations but seriously?
Can somebody shoot this A-hole (Gonzales)
What a dumb freaking statement!
"Jaime Gonzalez affirms that a general wage hike for all private sector workers contradicts the country’s current labor norm."
Yes Mr. Gonzalex thats the point, The Current Labor Laws, Rewards the rich, the Haitians, and Destroy the Dominican Poor, and Sends Dominicans abroad....
This Idiot MOFO
A balanced approach needs to be reached. Moreover,it would be better, if a regional approach, perhaps among the DR-CAFTA countries, to multilaterally address these labor issues were adopted. B/c if any one periphery country, god forbid, decides to actually improve the situation of workers, then they, like Atabey has so eloquently described, will be hammered by investors and markets controlled by the core countries. We should look at Chile to see how they've approached these issues- i.e., capital flow controls!
The state can always try to raise revenue by updating the tax code or imposing property taxes on the latifundistas (in order not to hurt the small land-owners), and then providing quality public services that would reduce the need to have higher wages. Let me explain, if quality public services (i.e., schools, health care, water, sanitation, transportation, security, etc.) were effectively provided, that would reduce the need by individual households of buying the "botellones" to drink water, or having to pay private schools, or having to have high security costs, or have a jeepeta b/c streets are in bad shape... The point is, if public solutions were found for public problems, then perhaps higher wages would be less of an issue.
If there are any historians out there, they can elaborate on this point, but the LAC region experience one of its greatest growth periods when international markets were interrupted during the world wars. Maybe there's something there...
"I think 10% would be fair."
What would BE FAIR is those who actually work hard and produce getting a pay raise. Those who are lazy and slack off or have no incentive not getting pay raises.
Yes, it may seem fair to "pay for quality". However, can you imagine having a a process of qualitative evaluation of work to decide who gets a raise! Not sure at all too many places are ready for that!
What you are arguing is based on the Wallenstein World System theory. The problem is that this theory of dominant core countries and periphery countries or satellites dependency can not address the REAL development of nations like South Korea, the other Asian Tigers, Singapore, Taiwan, and Chile! How have these nations prospered and gained in the case of South Korea Core status?
Yes, they didn't follow the Neo-Liberal school to the book, but they were able to thrive within the dominant economic forum dominated by the "core elites" USA/Canada, Europe, and Japan" I guess by now Wallenstein has added China into the "core mix" But however you may like to see it, the economic status of those nations that accepted market discipline, devalued their monetary unit to gain international competitiveness at crucial stages of its developmental model,
The way forward is clear: hard work, low wages, more education and training, and wages salary increases based on productivity gains. Anyone who has read about the South Korean economic development understands how difficult and hard the process was on the people of that nation. Long hard hours working for low wages, their children going to school for long hours of education, a government that directed investment flows into "key industries" to largely piggie-back on the Japanese economy. Sure the Vietnam War was beneficial during the 1960s and early 1970s, but the took advantages.
Dominicans I fear are becoming too caught up with the enormous differences between the pay structure in the US or even PR with those in their native soil. Too many see working for the equivalent as almost a "moral outrage" and seek a "socially determined wage structure." This ain't going to fly internationally and investors will go to other places to but their cash. That's how the game is played
Like I said, one theory doesn't explain everything, but there are elements that are obviously at work that definitely resemble Dependency theory.
gotta run, but good to engage someone on actual substance, and not yell around.
You state that "capitalism is based on one major lynchpin...CONSUMPTION"
You are wrong. The only way Capitalism can work is with Freedom. Freedom of choice to be exact. Every rule or regulation imposed on a society takes it more and more away from the Capitalism Ideal.
All one has to do is look at Hong Kong. An archipelago that has zero natural resources and yet was one of the most successful piece of real-estate on the planet due to limited regulation.
Now look at the poorest nations. All have Highly regulated and centrally controlled economies despite some of them being rich in natural resources. The Bureaucracy created by the regulation combined with that lack of freedoms breeds corruption which just exasperates the situation.
That said, we are very happy with our employees, who we have invested in, work hard with, and we gave them a well deserved increase in January, to reflect the large jump in COL. The increases we gave were actually more than 30%, and I hope we aren't going to be expected to add another 30% on top of that now.
You are wrong. The only way Capitalism can work is with Freedom. Freedom of choice to be exact. Every rule or regulation imposed on a society takes it more and more away from the Capitalism Ideal.
anthonyc, whenever a know nothing like you contradicts me, i take it as a badge of honor. a million free men with no money will not make capitalism work. then again, you are beyond being informed. throwing around words like freedom is academically childish. freedom to do what? to starve? freedom from what? you believe that the only way capitalism can work is if there are no price controls, no labor unions, no worker protection, no minimum wages, and no worker benefits. you believe that it only works when there are no restrictions placed upon the owners of the capital, who should be allowed to pay what they like, and charge what they like. well, look where it got the world....
From: Dominican Republic, Cabarete
Imposing increases, especially ones of this size, is always risky. Many businesses are here because of the low wage rates, and don't give a damn about living conditions for their employees. They certainly aren't here for the highly educated, highly skilled labour pool in this country (LOL)."
Excellent post. The larger society needs to educated about the Gloabl picture. To many wages are but a reflection of some Moral concern when in reality it has nothing to do with Morality and everything to do with Productivity and the competitive dynamics of your niche markets and competitors. People need to wake up and see the larger picture or a feeding frenzy will drive capital flows into the DR. The South Korean held the line on wages and only gradully increased them. They did provide for good education and increased infrastructure investments. Thus while peoples wages didn't go up fast, they did see
@Anthony- Freedom is a wonder concept that Neo-Liberals love to use, but that many social-scientists like to question. Like dread alluded to, there are "freedoms" and then "false-freedom." Anyone can go live in Casa de Campo, right? WRONG- only people w/ the $ to pay for it. Anyone has the right to a quality education, right? - again, only if you can afford it :-/ So it's only "freedom" to those who have resources, the working class and poor are still as excluded as if they were living in a feudal society. You may respond, "but people can move up in society..." Yes they can, but w/o a quality education system, w/o proper health care, w/ growing inequality, it doesn't seem as if the possibility of social-mobility (which again is a term Neo-Liberals love) actually increasing the number (or the type) of people who can go live in Casa de camp
THey do provide jobs though, which in and of itself are important. But I think things can be better. instead of focusing on developing cheap jobs, lets develop good paying jobs.