"I told you so..." (soaring costs & wages)

As food costs have skyrocketed, non-stop over the last 3 years, C.A. governments are eventually pressured to at least "do something". One response, which may seem quite logical, if not the only response in the face of such inflation, is to increase the minimum salary. Neighboring Honduras did so recently, moving the monthly wage from L3400 to L5500 (there is no hourly wage and most people know than 10-14 hours days, 6 days a week, are all-but the norm). What happens next?

This account is duplicated all over the country. The process goes something like this: Most people are not paid the minimum wage, and live off much less. In fact, L1400 to L2400 is the norm, especially true of older workers as their job prospects are horrible due to their age. When the minimum is raised and workers demand it or at least some adjustment, employers refuse. Workers cannot live without money, so most continue at the old rate. Now, with the new raise there is more enforcement and bureaucracy. It only takes one worker at any place to visit the Ministry and the employer is forced to deal with the problem - and the Ministry deals then with all employees there over the time of the disputed wages.

In a nutshell: worker made L1500 monthly for a decade, and was never paid the annual bonus or 13th month salary. So, the worker was -to keep the math simple- underpaid 120 months @ L2000 each, and was never paid for 20 months, making the debt to the employee way over a quarter million Lempiras. And, this is just one employee there; in most cases there are 3-8 others, too. At this point the employer will refuse to pay, just as he has all along. He will eventually produce stories regarding the laziness and lack of honestly the employee displayed on a daily basis, year after year. The investigator will ask the rather obvious question: if she always stole from you and never worked hard or showed up then why did you employ her for more than 9 years? No believable answer is ever forthcoming. When questioned regarding the yearly bonus and 13th month salary, the employer will maintain this was paid, as required per law. But, he will not have any evidence of this. Investigator will question all employees and all will confirm they have never received their added payments and that they work for just over half the minimum salary. Then the real fight ensues.

Realistically, many employers simply do not make enough money to pay the minimum salary, before or now. Many do, and a great many could come a lot closer to it than they feign. Those Employers lacking funds can negotiate to keep employees at the new rate, and some do, knowing full well they will later default on the back-salary contract and one night, unannounced, empty the business of property and funds. At this point employers with money start moving it, fast. Employers are given yet another chance to either take employees back at the new minimum wage (many couldn't afford the old one) and devise a repayment plan; most do not. Investigators then secure a document authorizing takeover or seizure of select business property if the repayment plan isn't started in a set period time. It usually isn't. Investigators prepare to lock down the business or raid it of inventory and business property of value. Due to the bureaucracy involved in this, Employers usually empty the place before this can be done. Those places that are raided often end up in a bizarre limbo.

One, once the raid ensues there is no work for anyone, not just the person who filed the grievance - and most people will not even get their pay for their last month of work, due to the limbo. Two, the back-salary amounts, collectively, are often so high that it is far more cost-effective to walk away from the business than it is to repay workers. Three, investigators lack the resources and authority to freeze non-direct-business and non-personal accounts (so money moved out of the country, or to another business with partners of any kind, or used as a bribe, all escapes and/or fixes the problem). Four, many employers are not Honduran and can much more easily leave and move funds, etc. Five, with the newspapers covering this story every day, no one with money has the slightest interest in starting a new business. Unlike years past, where an employee's trip to the ministry in a salary dispute involved only the investigator, employee, and employer, now it takes only one person to result in a full-business investigation (this often results in employee-on-employee pressure not to seek the salary they deserve, or are entitled to via the law, etc. - but if costs continue to rise, eventually the $70 monthly salary for 75 hours, weekly, minus transport and food fees will cease to be worth it at all). Eventually, if costs continue to escalate, the so-called minimum salary, or enforcement of it, will likely be a very big issue elsewhere and there is no simple answer to the problem (especially hard given that the problem coincides with plummeting remittances from abroad).

Weird thing. As HN President Manual Zelaya claimed, "We will force the business oligarchy to pay what is fair...", what really happened is a little different, and "I told you so" is everywhere: Every politician who ever said raising the minimum wage leads to massive layoffs and increased unemployment can sort of honestly look at the new stats and stories and say, "I told you so..."; every politician who ever advocated for better enforcement and worker rights years ago before problems ballooned can sort of honestly now look at the stats and stories and say, "I told you so..."; every politician who ever said a bad salary beats no salary at all can look at the stats and say, "I told you so..."; etc., etc., etc. Everyone is sorta "right", yet the vast majority of people are #$%^&*.