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June 27, 2007

CAFTA member Honduras slashes minimum wage... in order to compete with low-wage Nicaragua

The National Labor Committee has posted an action alert that shows just how much CAFTA has not lifted all boats, but to the contrary is creating pressures to capsize the whole working class flotilla:

First it was Alcoa workers in Mexico who were pitted against lower wage Honduran workers.  (They were told by Alcoa that they "could hire two Hondurans for every Mexican.")  Now that Alcoa has busted a union organized at its wire harnessing plant in the El Porvenir Free Trade Zone in Honduras--immediately firing all 50-plus union leaders and organizers--local Alcoa management is threatening that if the workers continue to organize, the plant will be shut down and relocated to NICARAGUA, where "labor is cheaper and workers don't make so many demands or cause problems." Alcoa's race to the bottom strategy has spread from the U.S. to Mexico and now to Central America, where under CAFTA the workers are being pitted against each other to work for less and abandon their legal rights...

In a related CAFTA-esque step backward, the Honduran Government has just reduced the minimum wage in the South of Honduras (including the department of Santa Barbara) from $178 to $136 a month. This is a 24 percent drop in wages, from 74 cents an hour to 57 cents. The largest free trade zone in Central America, the recently completed Green Valley Industrial Park is conveniently located in Santa Barbara to access the 57-cent-an-hour wages.  San Pedro Sula, where the majority of the maquila factories are concentrated, is just 20 miles or so from Santa Barbara.  How long will it be before wages drop in the rest of Honduras? The last time the export factory workers’ wages were at or lower than 57 cents an hour was 5 years ago. Today's 57 cent an hour wage is, in terms of real purchasing power, much lower due to inflation.

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I will be out of the office and country until Monday, Jan. 4. I will respond to your inquiry when I return. If you need immediate assistance, please contact Travis McArthur at 202-454-5127 or [email protected]

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