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By Moneth G. Deposa

SAIPAN, CNMI (Marianas Variety, May 24) – Raising the local minimum wage rate in the Commonwealth of the Northern Mariana Islands, which has been US$3.05 an hour since 1996, would "damage" the local economy, according to Gov. Benigno R. Fitial and visiting U.S. Deputy Assistant Secretary of the Interior for Insular Affairs David B. Cohen.

Cohen on Monday said some U.S. lawmakers are still pushing for the federalization of the Commonwealth of the Northern Mariana Islands minimum wage rate, but "we know that in time of financial crisis, making a change like that would be damaging to the economy."

Fitial said he agrees with Cohen.

"This is not the right time to raise the minimum wage because raising it would increase the cost of doing business in the Commonwealth of the Northern Mariana Islands and when you do that, in a time of economic downturn, it will only hurt the economy," the governor said, adding that "when you hurt business…you hurt the economy."

In the House of Representatives, Vice Speaker Justo S. Quitugua, D-Saipan, has introduced H.B. 15-52, which would raise the local minimum wage by US$1.20 over a three-year period — 40 cents in the first year, or to US$3.45; 30 cents in the second year to US$3.75; and 50 cents in the third year to US$4.25.

Proponents of a wage hike say that the low pay offered by the private sector has only led to the expansion of the local government, which remains the main employer of local residents.

Cohen said the federal government wants the Commonwealth of the Northern Mariana Islands to survive economically.

"We want to make sure that this issue will not have a substantial impact on the economic future of the Commonwealth of the Northern Mariana Islands," Cohen said.

Fitial said his administration is looking at ways to provide better salaries for local employees without increasing the minimum wage.

"I am now looking at ways and means to provide a better minimum wage for our local people by enticing the call centers because these call centers will be paying the U.S. minimum wage to our people. So instead of doing it through legislation, we are doing it by encouraging businesses that can afford to pay a higher minimum wage," the governor said.

In 1993, due to federal concerns regarding local labor and immigration policies, the Commonwealth of the Northern Mariana Islands government enacted a law that would have gradually increased the minimum wage until it had reached the federal level, which is now US$5.15 an hour.

In December 1995, then-Gov. Froilan C. Tenorio vetoed the bill to repeal the gradual wage hike law, but the 10th Legislature overrode his veto.

May 24, 2006

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