The Dominican Free Zone Association (Adozona) has asked for a postponing of a 10% wage increase due starting April. The increase would complete the 25% wage increase agreed upon earlier in the year. A first 15% wage increase was applied effective 3 January 2005. Adozona made the request arguing that its members are not competitive. The present lack of competitiveness has forced major job cuts in the sector, as reported in the Listin Diario. Adozona has argued that the governmental manipulation of the money in circulation has kept the exchange rate artificially contained. Since free zone work is for export, the companies are hurting from reduced revenues that served to compensate high production costs when the peso dropped from more than RD$50 to US$1 last year to the present approximately RD$28 to US$1.
Spokesmen for the free zone industry argue that production costs are pegged to when the peso was at a RD$40-US$1 level.
Arturo Peguero, president of Adozona, requested an urgent meeting of the National Salaries Committee to postpone the application of the 10% wage increase. Adozona is concerned that the new wage increase would stimulate more firings. Peguero argues that the second paragraph of Art. 456 of the legal framework that governs wages in the DR reads that if a resolution is deemed harmful, the Committee can revise it.