Read Recent Journals
Entered By: Mark
Entry Date: 2011-04-01 10:44:53
Subject: Friday April 01, 2011
Message:
 

      Minimum wage was raised in Honduras this week. This is the wage that most people receive if they are employed legally. The wage is raised every year, negotiated by business leaders and union leaders but ultimately decided by congress. This year the increase was pegged at the inflation rate plus the growth in GDP. The inflation rate was determined to be 6.5%. GDP growth was 3%. Therefore wages were increased 9%. The wage increase is retroactive to January, so employers must give a lumpsum to make up for the last three months.

      Two years ago the former president "Mel" Zelaya, raised minimum wage 80% overnight. Massive unemployment resulted. Honduras is definitely a dichotomy of haves and have nots. The have nots believe that legislation, rather than productivity increases, can be used to effectively distribute wealth. As an employer of a ministry, I can tell you that just because there is inflation, does not mean we receive more donations. Our donations have been pretty flat for the last four years and actually declined about 10% last year because of the ailing economy. Thankfully I have plenty of work to bridge the gap but we outspent our donations 2 to 1 before the wage increase.

     Labor costs on the farm are of course the largest expense, followed by food, then medical expenses and transportation. It has always been my hope to help struggling parents keep their families together by providing jobs, but the truth is that the law here is forcing me to back off that a bit. I've already broken the news to the two farm hands that I am going to have to make some changes in the way their pay is determined. I am thinking of making all their work project/contract based rather than a monthly wage. This is tricky also as the labor laws are very pro-employee.

     I can go contract, but if a disgruntled contractor runs to the labor board it would be extremely difficult to avoid some huge settlement, even if the laws are on my side. We were here only two months before we owed three ex-workers a total of $7000. We did not hire them, they were here when we arrived. They abused the boys and stole from the home, but we still had to pay. The worker is always right in the eyes of the law.

    Honestly, I could easily replace one worker by buying a professional grade weed eater for about $450. This would save us a lot over time, but it's difficult to take a job from someone in a country where there are not enough jobs to go around. We could probably replace both workers if we had a small tractor, but same deal.

     So I am torn between economics, labor laws and a heart to help. It is possible that a tractor could make the farm productive enough to support 2-3 workers, but it's difficult to tell.





Read Recent Journals

Other messages by Mark
Frozen Pizza Night  by Mark on Tuesday October 23, 2018
Perfect Guy Breakfast  by Mark on Saturday September 29, 2018
Perfect Guy Breakfast  by Mark on Tuesday July 24, 2018
re: New Server  by Mark on Monday July 02, 2018
New Server  by Mark on Tuesday May 29, 2018
Repairing and Painting  by Mark on Tuesday May 29, 2018
Summer  by Mark on Tuesday May 22, 2018
Inbound  by Mark on Saturday January 27, 2018
Monday December 25, 2017  by Mark on Monday December 25, 2017
Kids Home  by Mark on Saturday December 16, 2017

See other journal entries

958