Business in Honduras - The Honduran Worker Part 1

B.O.B. (Bombs Over Baghdad) - Outkast
"before you re-up, get a lap top. Make a business for yourself, boy set some goals. Make a fat dime out of dust and coals"

I've spent countless hours discussing the problems with business in Honduras. I've spent even more hours studying "Business in Honduras". No not studying business at a university, I've been studying business here with a more "hands on" approach. I'm not an economist or expert on local business, but I can say that I have spent some time in various levels of business in Honduras. I also like to claim that Polache and the undercover boss T.V. show kinda jacked my idea, but I'm not worried about it because I've forgotten better ideas than that!

I've worked (for short experimental stints) as a cattle herder and yard worker in San Manuel and a coconut vendor on the beaches of Tela. Through these "internships" I gained valuable insight about the type of work that most Hondurans depend on and the living conditions they retreat to after work. I've worked as a teacher at a private school, which has allowed me to understand some of the flaws in our educational system. I've managed "accounting" departments for a resort and small retail chain, with terrible timing, as I learned how political sanctions (during the "coup") on an already impoverished country and a dwindling economy (world and local) can hinder business. My tenure as the manager of a hostel granted me understanding of the tourism industry and it's importance to our economy. All of these jobs gave me an opportunity to study the common procedures, or lack thereof, that are practiced (or not) in most businesses. More importantly, I've been blessed with the opportunity to discover what being "Honduran" really means.

Regardless of what industry you discuss; agricultural, tourism / service related, educational, manufacturing, etc..., EVERYONE has one common complaint: the workforce. No one voices that complaint louder that Gringos. I even complained about the same thing when I first arrived in Honduras (and still do sometimes). Gringos (and I) are accustomed to business in the U.S. and other developed nations. Nations that provide its citizens with top notch education and even work training for free. In these countries, everyone has an opportunity for advancement because hard work and dedication can level the playing field for anyone. Even people from trailer parks and the projects can climb the ladder if they have the will for it. It may be difficult, but nothing is impossible. Unfortunately, that's not the case in Honduras. We don't have many of those "feel good" stories about the Mc Donald's employee ending up as a Regional Manager. There is no opportunity for growth here, only survival. It's unreasonable to assume that people in Honduras will approach work with the same dedication.

"Hey, I started out mopping the floor just like you guys. But now... now I'm washing lettuce. Soon I'll be on fries; then the grill. And pretty soon, I'll make assistant manager, and that's when the big bucks start rolling in." - As funny as this seems, it's more than most Hondurans get!

Gettin it by Too Short
"Get your kids in school, so they can get an education, get a degree and take a vacation."

Getting paid and working conditions!
I've never been able to understand how people can survive on minimum wage (In the US or Honduras). When I lived in L.A., the California minimum was $8.00 per hour. This is based on a 40 hour work week, paid sick days and vacation time. California law also mandates two breaks and overtime pay; one 15 minute and one 1 hour lunch break per 8 hour shift in addition to overtime pay for work exceeding an 8 hour shift (time and a half after 8 hours and double pay after 12 hours). Minimum wage pay doesn't provide enough for a family to live on, but a single person gets by with approximately $1,000 / month. My rent alone surpassed that by $600, "that's crazy (Say it like Tracy Morgan)!!!" Even minimum wage employees in the US strive to do their best on a daily basis because you can stand out and snatch that opportunity to grow.

When I arrived in Honduras, minimum wage was Lps. 3,500 per month. That's $185.23 based on a 46 hour work week, usually with no breaks, no company sick days. Based on a 26 day work month, that's Lps. 134.62 ($7.12) per day with only four days off per month!!! Now factor in the travel expense of Lps. 20 - 60. Dayyyyuuuuum!!! The only way you can get compensated for sick days is by paying into social security (from that whopping salary), which employers detest. Overtime pay is a foreign concept even to the Gringos here. I've witnessed employers demand and expect (not request) an employee to work double shifts and compensate that second shift for a lower rate than their normal pay. In some cases, employees receive absolutely no compensation for working extra hours. Think I'm fibbing? Check out this article from the Bay Islands Voice (Click Here)

The Honduran minimum wage has been raised to Lps. 5,500 per month. A substantial increment (57.14%), but still far from enough for anyone to survive on. At first, I was completely opposed to the sudden increase. I worried about the negative effects on small business and the lay offs that would follow. Some businesses had to close their doors, some decided to lay off employees and extend hours for the ones that remained in order to survive. Other businesses decided to disregard the new laws and STILL pay less than the minimum. In some cases employers exploited the desperate need of employees by extending their hours and refusing to pay them a fair rate for the extended hours. They actually benefited at the expense of the labor force. So now, one person works twice as much and the employers pay less than what they would pay two people.

With these working conditions and compensation rates, it's no wonder why our economy is so dependent on remittances from our people in the U.S.

Our other sources of income stem from the exportation of produce (mostly bananas and coffee), tourism, and the slowly growing textile production or "maquilas". Ironically, these industries are the most infamous for exploiting and mistreating the Honduran workforce. How can we expect our agricultural, textile and tourism industries to grow if we mistreat the workforce that these industries are dependent on?

Do we really expect to diversify our economy with "call centers" and new production if we haven't been successful with the industries we've relied on for years?


From personal experience:
I worked at a resort as the Accounting Manager, I also lived there (For free? Hell nah!!!). When I arrived in May 09, my first task was to "close out the fourth quarter for 2008". WTF!!!?!?!?!?!

Let me put it in perspective: We were then in the second quarter of 2009 and I had to close out the last quarter for the previous year. This means that I had to generate maintenance billing (without any record of maintenance work or expenses) for October - December in 2008, and distribute rental income to the owners of the rental units. It is safe to assume that all the owners were pissed about the uncertainty of their rental income. Don't get it twisted, I wasn't being asked to solely focus on 2008's 4th Q, I also had to work on 2009's 1st Q and all the day to day responsibilities that go along with managing an accounting department AND trying to develop training material for my department (I was silly enough to think I would have time for that).

On many days, I would be in my office at 5 A.M., trying to get a jump on things without any interruptions from the day to day routine or co-workers. At 7 A.M., I would head to the restaurant for breakfast. On many occasions, I arrived there to realize that none of the servers came to work in protest of terrible treatment from superiors or they had simply quit. Always having my employer's best interest in mind, I would decide to tend to the restaurant customers vacationing at the resort so they didn't leave with a bad taste in their mouths. I would sometimes do so until 10 A.M., when the employees designated to the afternoon shift would (be pressured to) show up to cover for the absences (for no pay, of course).. I would then return to my office and often work until 9 P.M. (or later), eating my lunch and dinner at my desk.

Guess what I received in return for my work and dedication? It's not compensation for extra hours, guess again... No, not a "Thank you" either, try again... I was faced with penalty threats and insults!!! Nice...!

Getting unpaid - Penalties!
At the private school I worked at, speaking in Spanish was a $5.00 fine!!! I was supposed to teach British Literature to kids that didn't speak or understand English. WTF?!?!?!

It is common practice in Honduras to penalize employees for mistakes. At one place I worked, I was penalized $3 for voiding a check, even if it was the boss' fault!!! I was also penalized for failing to deduct an absent day from someone's pay, that same absent day was then deducted from the employee's next paycheck. So the employee missed one day of work, and two days of work were deducted from two different employees. Huh?! At that same place, I witnessed waiters and cooks being charged the sales price of menu items ($7 - 15) that customers were not satisfied with or even if they changed their order. Broken glasses and plates also resulted in fines. In other countries, these losses are accounted for as business expenses, not an employee's personal expense.

Lets think about this in numbers: If someone is getting paid $7.12 per day and gets penalized $10 for a returned order, the employee is working that entire day and a portion of the next day for FREE and the restaurant is still making a profit on their dish. Am I the only person thinking "modern day slavery?"

Prestaciones!
Prestaciones is the Honduran version of severance pay. Employers cringe at the sound of this word and are willing to jump through hoops to avoid paying them. Honduran employers seem to pay them, while foreigners would rather pay others to "fix" the problem with legal intimidation. Before becoming aware of the business practices in Honduras and living conditions of the general population, I was opposed to this concept. But now, after familiarizing myself with the work and living conditions, I'm all for it. In most cases, Honduran's only have what they get every pay day.

Imagine a Honduran with zero savings quitting or being fired. What do you think they will resort to with no work? Think hard... nothing yet? Well marinade in Kanye West's quote for a few minutes. This is from the song, We Don't Care; "We forced to sell crack, rap, and get a job"... That's in the hood, now imagine that same mentality adapted to the third world... What do you get? I think it would go something like this: We forced to sell crack, rob, extort, kidnap and hope for a job...

You may ask, "Why would someone accept this treatment?" Again, most Hondurans only have what they are going to be paid and that is it. We live our lives accepting that we have no rights. No freedom of speech, no employment rights, no legal rights, and to top it off - all our public officials have been bought.

My respect to all the Honduran's that continue to work honestly despite these conditions. To all the Honduran's that have decided to resort to crime, "I undastand"...

IZZO by Jay-Z
Like I told you sell drugs - No! / Hov' did that so hopefully you won't have to go
through that

Don't Feel Right by the Roots
If you ain't tryin' to get popped, then give me a option

Part 2!!!
I haven't started writing part 2 of God know how many, but it will focus on stealing... That's another common complaint from Gringos, in the words of TWO of my former employers, "Every Honduran steals." Apparently these people were not familiar with the saying "When you point a finger, four point back at you" or the fact that I too, am a Honduran; so you're spitting in my face when you say that. Maybe by that time they had forgotten that when employing me, one of the first things, if not the first thing, that I was made aware of, is the fact that they "have two sets of books; one for the Government and one for the business." In other words, tax evasion.

Are they stealing from the Honduran worker? Are they stealing from the average Honduran family? Are they directly influencing the quality of education that Honduran's receive? Are they partly at fault for the poor preparation of the future workforce? YES! YES! YES! and YES! - tsk, tsk, tsk

Before ANOTHER Gringo attempts to argue that they prefer to "keep that money rather than give it to the corrupt politicians because their money is used for better purposes." I have to say, that's like the pot calling the kettle black... Who determines whether or not your "charitable contributions" (that will be used as tax write offs in the US) really benefit the Honduran people? It's no big secret that some "charities" are the source of income for many of the foreigners running them, and I don't know about you, but I haven't seen any of those Gringos living like Hondurans...

I do have to state that some people genuinely try to help Hondurans by setting up REAL non-profits, but not all...

Every company I've done accounting for in Honduras has an expense account titled "Theft Loss", so yes, SOME Hondurans do steal, but this also the rug that all the losses from poor management are swept under. Don't worry Hondurans actually stealing will also be discussed as to not disappoint the Gringos...