20% increase in the minimum wage at manufacturing free zones

[Dolores]

The Ministry of Labor announced a 20% increase in minimum wage for employees of manufacturing free zones. The wage increase was approved during the Tuesday, 11 April 2023 National Wages Committee (CNS) session. The wage increase will be applied 15% as of 1 May 2023 and 5% as of April 2024. The previous minimum wage in free zones was RD$13,915.00. The new wage as of 1 May will now be RD$16,002.25, increasing to RD$16,700 by April 2024.

Free zone industries employ more than 192,000 direct workers. Most of these make more than minimum wage.

Recently, the government announced a private sector minimum wage increase of 19%.

Read more in Spanish:Diario Libre El Dia...

[url=https://dr1.com/news/2023/04/12/20-increase-in-the-minimum-wage-at-manufacturing-free-zones/]Continue reading...

 

[chico bill]

Well DR should expect fewer jobs coming to DR. The inflation spiral is killing us all

 

[windeguy]

Since most workers make more than the minimum wage, what is the real effect?

 

[Yourmaninvegas]

Fewer jobs coming to the Dominican Republic?

With a massive residential construction boom, those moving here to live, massive infrastructure improvements, and increased tourism.
Yep, we should expect fewer jobs coming to the Dominican Republic.

 

[windeguy]

Perhaps fewer Free Trade Zone jobs. Time will tell.

 

[Facepalm Supreme]

Perhaps fewer Free Trade Zone jobs. Time will tell.

Absolutely. When I originally moved here I was interested in the relatively lower wages and the possibility of employing individuals. Unfortunately there are deep-rooted problems with the Dominican work culture, labor laws, and the prices here are not as attractive here as they were in the past, nor as attractive as they are in other parts of the world where people speak English either as a first language or as a 2nd language with high proficiency (much higher than the average Dominican Call center worker).

There are 12 months in the year, not 13. I don't want to pay an obligatory 13 month bonus as it isn't culturally the norm where I come from. I don't want to hire people who will drag their feet to get things done, or intentionally do things to get fired because there are obligatory severance packages that make it an attractive option for a worker who can simply find another job after they burn their bridge(s) at any previous jobs.

I am aware that the free trade zones and any associated wage increases don't impact call center work or workers but the same problems are rampant in mostly all sectors. Also, these call center/communications jobs are MUCH more precariously established and much more dangerous to lose as they are a major driver for upwards mobility amongst younger individuals seeking higher wages. You can't quite send manufacturing or Agricultural production jobs to Asia or Africa easily without incurring much higher transport and startup costs, but they are also in jeopardy. That said, communications jobs are way too easy to send somewhere else where people desperately want to work and communications infrastructure is just so so affordable these days that it is really putting this sector of the economy into serious jeopardy to continue to make it increasingly difficult to do business here.

 

[Yourmaninvegas]

If you don't want do as the local labor laws dictate...don't open/start/move a business to the Dominican Republic or hire domestic workers.
Or
Become a citizen (like many of our most vocal members of DR1) and lobby to have the laws changed to your preferences.

 

[Facepalm Supreme]

You can act hard all you want. The fact is money talks and BS walks, and if I can get a better deal somewhere else I (and many others) will do that. Furthermore, business owners and those responsible for increasing profits are generally on the cutting edge of things/ahead of the game and are very financially saavy individuals.

When/if businesses and factories move production and communications work to other countries and tens or hundreds of thousands of jobs go poof forever, don't say you weren't warned.

There are many places with 5-10X the population of the DR with tens of millions of people - the same # as the entire population of this country - looking to move from the agricultural and menial labor sectors into manufacturing and communications work and they have greater English ability than people in the DR do. When/if the shift happens it is going to be extremely painful.

Right now DR relies on Remittances, Individuals who move to the USA with no intention of permanent settlement but rather moving money from the USA to their country, Tourism, Money laundering/black mark transshipment revenue, Foreign investment and sales to Haiti. If any or all of those revenues lower, there will be very serious problems, very quickly. None of those income sources are stable as the 21st century moves closer to the 22nd century.

One thing I can say that DR has going for it is a very vibrant and strong national agricultural market. At the very least Dominicans won't be starving in the streets.

 

[william webster]

Facepalm

If you report a delinquent worker to the labor dept three times for misdemeanors, you can fire them without severance

Employers have rights too

So some homework

 

[windeguy]

Absolutely. When I originally moved here I was interested in the relatively lower wages and the possibility of employing individuals. Unfortunately there are deep-rooted problems with the Dominican work culture, labor laws, and the prices here are not as attractive here as they were in the past, nor as attractive as they are in other parts of the world where people speak English either as a first language or as a 2nd language with high proficiency (much higher than the average Dominican Call center worker).

Sad but true.

There are 12 months in the year, not 13. I don't want to pay an obligatory 13 month bonus as it isn't culturally the norm where I come from. I don't want to hire people who will drag their feet to get things done, or intentionally do things to get fired because there are obligatory severance packages that make it an attractive option for a worker who can simply find another job after they burn their bridge(s) at any previous jobs.

Indeed these are major issues.

I am aware that the free trade zones and any associated wage increases don't impact call center work or workers but the same problems are rampant in mostly all sectors. Also, these call center/communications jobs are MUCH more precariously established and much more dangerous to lose as they are a major driver for upwards mobility amongst younger individuals seeking higher wages. You can't quite send manufacturing or Agricultural production jobs to Asia or Africa easily without incurring much higher transport and startup costs, but they are also in jeopardy. That said, communications jobs are way too easy to send somewhere else where people desperately want to work and communications infrastructure is just so so affordable these days that it is really putting this sector of the economy into serious jeopardy to continue to make it increasingly difficult to do business here.

It is a shame that the skills cannot be readily developed here that make production of items more attractive because of the lower shipping charges and DR-CAFTA agreements. The Island Mentality would need to be overcome. All of that is fueled by the labor laws you mentioned above.

 

[Yourmaninvegas]

Act hard...I am indestructible.

As hard as they come.
Step to me in real life and you will find that out,
Some talk.
They are fake.
Some do.
They are real.

Which one and I?
Make an appointment to see me and find out.

The Dominican Republic has existed for years in the shadow of great affluence.
Anyone talking about investing in physical plant to as being the way to national affluence is going to be left in the real view mirror.
Unless you are provided a basic commodity (like food).
The next age is the information age.
If I was running things (and I am not nor have I been asked to serve) I would make ESL standard, teach coding, and about what money is.
That way the geniuses who think they are all that (because they opened a business and have employees) can get knocked down a peg by individuals who realize they are sovereign in and of themselves.

Increase in minimum wage?
Chump change
Window dressing on their wage slave operations.
Technology is the way to go and the taxes on electronic equipment need to be lowered.
Everyone should have access
Internet should be considered a utility (because it is) in this day and age.

I say take your wage slave jobs somewhere else.
Dominicans will find a way to make it.
They always have.

 

[Yourmaninvegas]

Sad but true.

Indeed these are major issues.

It is a shame that the skills cannot be readily developed here that make production of items more attractive because of the lower shipping charges and DR-CAFTA agreements. The Island Mentality would need to be overcome. All of that is fueled by the labor laws you mentioned above.

The Dominican Republic should find another way and not follow the path of forcing its people into jobs a wage slave wages.
It starts with education.
Real teachers not FAKE ones.

 

[Facepalm Supreme]

Facepalm

If you report a delinquent worker to the labor dept three times for misdemeanors, you can fire them without severance

Employers have rights too

So some homework

Sounds like daycare/pre-school. I come from a land where we have what's called at-will employment. That means that as long as you desire to work for/with me, and I desire you to work for/with me, we have a business relationship. The moment that either one of us changes our minds, the contract ends unless otherwise stipulated within our contract.

An employee, unless they agreed to a contract that states otherwise should not be forced to report to work and work for an employer if they don't desire to do so. The same is true of an employer. If I don't want to be involved in business with you, unless we've signed a contract that states otherwise that should be the final word. No severance, no "reporting" to a government agency to make reports about you, none of that.

 

[Facepalm Supreme]

Act hard...I am indestructible.

As hard as they come.
Step to me in real life and you will find that out,
Some talk.
They are fake.
Some do.
They are real.

Which one and I?
Make an appointment to see me and find out.

The Dominican Republic has existed for years in the shadow of great affluence.
Anyone talking about investing in physical plant to as being the way to national affluence is going to be left in the real view mirror.
Unless you are provided a basic commodity (like food).
The next age is the information age.
If I was running things (and I am not nor have I been asked to serve) I would make ESL standard, teach coding, and about what money is.
That way the geniuses who think they are all that (because they opened a business and have employees) can get knocked down a peg by individuals who realize they are sovereign in and of themselves.

Increase in minimum wage?
Chump change
Window dressing on their wage slave operations.
Technology is the way to go and the taxes on electronic equipment need to be lowered.
Everyone should have access
Internet should be considered a utility (because it is) in this day and age.

I say take your wage slave jobs somewhere else.
Dominicans will find a way to make it.
They always have.

(insert the "in your face" emoji here)

You talk a lot. I hope when the jobs disappear you are willing and able to put food and disposable income into people's mouths and hands.

There are hundreds of millions of people in the globe ready to JUMP into the manufacturing and communications markets yesterday. I have employed people on multiple continents and in numerous countries. Have you? I've done business on every continent except Australia and Antartica. Have you?

What is stopping any Dominican from learning English right now? Especially given that speaking English immediately opens up numerous doors in the employment world and basically doubles or triples your income just like that. The people running things have no interest in the average Dominican speaking English, or French or Kreyol for that matter.

Opening a business without your parent's money or a loan is nothing to scoff at. If it were that easy, everyone would be doing it. Those who survive the firsrt 3-5 years have accomplished something that the vast majority of people in human history have not.

If you want to offer higher wages or don't agree with the market why not start a business and do it? What's stopping you?

 

[Facepalm Supreme]

The Dominican Republic should find another way and not follow the path of forcing its people into jobs a wage slave wages.
It starts with education.
Real teachers not FAKE ones.

Education starts at home. This is not a country where education whether from the top down or the bottom up is prioritized.

You need look no further than the educational initiatives and culture of Jamaica or middle class Haiti to see the glaring difference between "education" in LatAm and the rest of the Caribbean. Cuba is a HUGE outlier/exception to the rule of education in Latin America and should be an example to all Latin American countries. Highest literacy rate in the hemisphere, amongst the most highly trained and skilled medical workers in the hemisphere. They are way behind on technology compared to the USA or even DR but they are on par with Asian expat community and middle-upper class American medical workers. Some of the absolute best in the world.

 

[JD Jones]

Sounds like daycare/pre-school. I come from a land where we have what's called at-will employment. That means that as long as you desire to work for/with me, and I desire you to work for/with me, we have a business relationship. The moment that either one of us changes our minds, the contract ends unless otherwise stipulated within our contract.

An employee, unless they agreed to a contract that states otherwise should not be forced to report to work and work for an employer if they don't desire to do so. The same is true of an employer. If I don't want to be involved in business with you, unless we've signed a contract that states otherwise that should be the final word. No severance, no "reporting" to a government agency to make reports about you, none of that.

The "land you come from" has nothing to do with how employees are handled here. Most employees here sign a contract saying they will exchange labor for wages.

Many of them work as expected. Others will work for 3 months then slack off in order to be fired and liquidated. Many employers will go the "three strikes and your out" termination without pay, but many just pay the liquidation because it is the least expensive alternative.

 

[NanSanPedro]

The "land you come from" has nothing to do with how employees are handled here. Most employees here sign a contract saying they will exchange labor for wages.

Many of them work as expected. Others will work for 3 months then slack off in order to be fired and liquidated. Many employers will go the "three strikes and your out" termination without pay, but many just pay the liquidation because it is the least expensive alternative.

But to Facepalm's point, why would anyone invest in a business if this attitude is prevalent? India and SE Asia are much better to start a business.

 

[JD Jones]

But to Facepalm's point, why would anyone invest in a business if this attitude is prevalent? India and SE Asia are much better to start a business.

Because the good workers far outweigh the bad.

 

[Yourmaninvegas]

Nothing can stop me.

Because only I can stop myself.
What I don't do is listen to complainers are are best at writing posts about situations they cannot control.
I just get it done.

No, I have not run business all over the world.
Just two countries.

I spent the better part of my life serving my fellow citizen.
Running towards and confronting what others run from.
Things that would probably make you lose your spine out your lower hole.

Now on to the subject of the thread...

I have started and run a business in the Dominican Republic.
If you have not done the same then do what you do best: Be a keyboard warrior.
Stay safe.

Because the good workers far outweigh the bad.

Exactly, I hear the work being done by one of mine right now.
Circular saw being operated in the process of building something the business needs.

@Facepalm Supreme you are not better than anyone else due to your DNA from the genetic lottery your parents gave you.
I put my work in.
My parents are dead.
But I certain they would be proud of my accomplishments.
Have you actually owned a business or were you just a highly paid wage slave?

How you like me now?

 

[Yourmaninvegas]

Opening a business without your parent's money or a loan is nothing to scoff at. If it were that easy, everyone would be doing it. Those who survive the firsrt 3-5 years have accomplished something that the vast majority of people in human history have not.

One of those, in two countries.
Thank you very much.

If you want to offer higher wages or don't agree with the market why not start a business and do it? What's stopping you?

No need for me do to any of that because I think different.
I am doing something no one else in my area is doing.
I do not compete on price.
And yet I cannot supply the demand for my product.